Wed, Feb. 11, 5:36 PM
Wed, Feb. 11, 4:06 PM
Tue, Feb. 10, 5:35 PM
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Fri, Jan. 30, 4:50 PM
Mon, Jan. 26, 11:27 AM
- Seagate slightly missed calendar Q4 revenue guidance and guided for calendar Q1 revenue of "at least $3.45 billion," compared with a $3.59B consensus.
- The hard drive giant reported 4% Y/Y Q4 increase in PC drive shipments - notebooks were up, desktops were down - and a 17% increase in enterprise shipments (lifted by demand from Internet giants).
- Intel (INTC -1.8%), HP (HPQ -3%), and NetApp (NTAP -2%) are all selling off on a day the Nasdaq is near breakeven. Intel has already guided for its PC CPU division's sales to drop by a low-single digit % in 2015, but has also forecast its server CPU division's sales will see a 15% CAGR through 2018.
- Separately, the WSJ reports (citing an internal e-mail) HP has named a new leader for its H3C Technologies Chinese networking hardware unit, following worker protests. The paper reported in October HP wants to sell at least a 51% stake in the business, as China tries to cut its reliance on U.S. IT hardware in the wake of the 2013 NSA spying uproar.
Tue, Jan. 13, 10:19 AM
- Believing new data center/storage architectures "increase competitive risks," stand to limit margin expansion, and could require acquisitions to bolster the company's portfolio, Pac Crest's Brent Bracelin has downgraded NetApp (NTAP +0.8%) to Sector Perform.
- Nonetheless, Bracelin has kind words for NetApp's recent performance. "Management's solid execution over the past two years has contributed to a stabilization within NetApp's branded storage, which grew 2% y/y last quarter ... Operating margins have expanded 300 basis points to 18.3% from 15.3% in F2013."
- Many on the sell-side have already argued rising cloud storage adoption - boosted by a never-ending price war - and the deployment of scale-out cloud data center architectures relying on commodity hardware serve as competitive threats. Intensifying competition from flash and hybrid array vendors - both from smaller firms such as Violin Memory and Nimble Storage, and bigger IT names such as EMC and Cisco - has also been seen as a challenge.
- NetApp is trying to limit the damage done by the the first trend by rolling out a version of its ONTAP OS (Cloud ONTAP) that tightly integrates with public cloud infrastructures. It's addressing the second through its recently-launched FlashRay systems, which rely on a new OS called Mars (contains features that minimize latency and I/O activity).
- With the Nasdaq up 1.7%, NetApp is higher in spite of the downgrade.
Nov. 12, 2014, 5:36 PM
Nov. 12, 2014, 4:07 PM
- NetApp (NASDAQ:NTAP) expects FQ3 revenue of $1.56B-$1.66B, in-line with a $1.62B consensus. But EPS guidance of $0.74-$0.79 is below an $0.80 consensus.
- FQ2 branded revenue rose 2% Y/Y to $1.42B. OEM revenue, hurt by declining IBM sales, fell 22% to $119M.
- Gross margin rose to 65% in FQ2 from 64.3% in FQ1 and 63.6% a year ago. Opex rose just 2% Y/Y to $727.5M. $600M was spent on buybacks, boosting EPS.
- NTAP -3.1% AH. FQ2 results, PR.
Nov. 12, 2014, 4:02 PM
Nov. 11, 2014, 5:35 PM
Oct. 27, 2014, 4:48 PM
- NetApp (NASDAQ:NTAP) is acquiring Riverbed's (NASDAQ:RVBD) SteelStore backup/recovery storage appliance line for $80M in cash. NetApp expects to start offering the products in FQ3 (its January quarter).
- SteelStore systems use both deduplication and compression to cut down on storage usage. They work with primary storage systems from NetApp and 3rd-party vendors, as well as various cloud storage platforms.
- The purchase arguably plugs a hole in NetApp's product line relative to EMC, which has been offering its Avamar backup/recovery appliances (also supports deduplication and compression) for a while. NetApp and EMC once waged a bidding war (won by EMC) for leading deduplication system vendor Data Domain.
- Riverbed, meanwhile, is in the middle of a strategic review that reportedly includes M&A talks.
Oct. 20, 2014, 2:28 PM
- Cisco (CSCO -1.7%), VMware (VMW -1.5%), F5 (FFIV -1.5%), NetApp (NTAP -1.5%), Teradata (TDC -3.3%), and SGI (SGI -3.5%) have joined several other enterprise tech names in declining after IBM and SAP each posted disappointing Q3 reports. The Nasdaq is up 1% on the day.
- IBM provided a smorgasbord of bad news: A Q3 miss, soft full-year guidance, the pulling of a $20/share 2015 EPS target, a 15% Y/Y hardware revenue decline, and a 7% Y/Y services backlog drop. In addition, the IT giant said it "saw a marked slowdown in September in client buying behavior."
- Citing the impact of a shift in customer spending towards subscription-based cloud apps from on-premise software (typically paid through an up-front license fee), SAP slashed its full-year op. profit forecast. Q3 revenue was slightly below consensus, and EPS in-line.
- VMware reports tomorrow, F5 on Thursday, SGI on Oct. 29, and Teradata on Nov. 6.
Oct. 2, 2014, 6:26 PM
- In the latest ripple effect from the Supreme Court's June software patent ruling, Acacia's (NASDAQ:ACTG) Summit Data unit has been ordered to pay $1.4M in attorneys' fees to NetApp (NASDAQ:NTAP) over an infringement suit Summit filed in 2010. Among other things, the S.C. ruling made it easier for victorious defendants to collect legal fees.
- District Judge Gregory Sleet took issue with the fact Summit accused NetApp of infringing its patents via software that interacted with a Microsoft OS, given Microsoft (through a deal with RPX) had licensed the patents before the suit was filed. He also accused Summit (citing its history) of trying to "extract quick settlements that were dwarfed by the costs to litigate."
- The ruling, which Acacia might appeal, is one of a string of judgments to go against IP licensing firms since June. Vringo, VirnetX, and Wi-Lan have been among the casualties.
Sep. 6, 2014, 8:43 AM
- The "total" yield of a company combines the dividend yield and the buyback yield - that is the yield boost from reducing the total amount of shares outstanding. Together with S&P's Howard Silverblatt, Barron's puts together a list of the top 20 companies in the S&P 500 based on "total" yield.
- While buybacks don't guarantee a strong stock - witness consistent buyback champs like IBM and Kohl's (NYSE:KSS) - Warren Buffett goes to bed at night praying for IBM's share price to go down so the company can buy back more stock for a given dollar amount (though The Oracle has said he doesn't expect this logic to win many fans).
- The flip-side are those companies - financials and energy come to mind - who tend to buy back stock at high prices only to find themselves forced to reissue it at lower prices when times get tough. A consistent plan helps, and Travelers (NYSE:TRV), under CEO Jay Fishman, has been maybe the best example of this - halving the share count since the end of 2006.
- ETFs? The Powershares Buyback Achievers Portfolio (NYSEARCA:PKW) gained 45.6% in 2013, 1,300 basis points better than the S&P 500. Since inception in 2006, it's up an annualized 9%, more than 200 basis points better than the S&P. A newcomer - the Cambria Shareholder Yield ETF (NYSEARCA:SYLD) - has beaten the S&P by about 250 basis points since its May 2013 inception.
- The list (ranked in order of "total" yield): ADT, CAM, CF, MOS, MPC, VIAB, GLW, ITW, STX, IBM, NOC, CTL, TRV, VRSN, IR, CCE, KSS, NTAP, HES, DO.
Aug. 14, 2014, 4:00 PM
- "Demand from enterprises improved (especially in the U.S.), with a notable increase in [$1M+] million deals. We believe this data point, combined with results from CDW, SNX, IM, STX & WDC suggests a 2H spending cycle in US commercial," writes Needham's Richard Kugele, who has upgraded NetApp (NTAP +5.2%) to Buy following its FQ1 beat and in-line FQ2 guidance.
- Pac Crest's Brent Bracelin is pleased with NetApp's gross margin gains, which he thinks highlights the company's "software-intensive model and technology differentiation." He also notes attach rates for NetApp's clustered storage software "is now approaching 50% on mid-range products, more at the high end." NetApp mentioned on the CC (transcript) shipments of clustered nodes rose 177% Y/Y.
- Also mentioned: NetApp's anticipated FlashRay systems (built from the ground up to handle flash storage) will begin shipping next month, thus filling a hole in the company's lineup as it squares off against purpose-built flash hardware from EMC, IBM, and a slew of startups. Ahead of the launch, shipments of other all-flash products rose 48%.
- The company still has its skeptics following many quarters of soft growth. Credit Suisse's Kulbinder Garcha: "NetApp’s LT growth potential remains depressed reflective of changing enterprise focus, commodity infrastructures, and competitive pressure from EMC in mid-range and nimble startups."
- NetApp's branded revenue rose 1% Y/Y in FQ1 to $1.36B. OEM revenue, hurt by the winding down of the IBM deal, fell 23% to $129M.
Aug. 13, 2014, 5:28 PM
- NetApp (NASDAQ:NTAP) expects FQ2 revenue of $1.49B-$1.59B and EPS of $0.66-$0.71, in-line with a consensus of $1.53B and $0.69.
- Product revenue remains soft amid tough competition and cloud-related pressure: It fell 5% Y/Y in FQ1 to $882.6M. Service revenue (driven by past sales) rose 8% to $385.3M, and software entitlement/maintenance revenue fell 3% to $221.3M.
- Gross margin rose 300 bps Y/Y to 64.3%. GAAP sales/marketing spend grew 3% to $480.2M, and R&D was roughly flat at $228M. $118.9M was spent on buybacks.
- NetApp's deferred revenue balance rose 5% to $3.08B. The company ended FQ1 with $5.6B in cash/investments, and $1.5B in debt.
- NTAP +0.3% AH. FQ1 results, PR.
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