Shares of Network Appliance Inc. (Nasdaq: NTAP) took a hit this morning after the company announced last night that revenues from its second quarter had fallen 25 percent compared to the same period last year -- and company executives said they saw no new growth on the horizon.
NetApp shares fell 2.57 (14.13%) to $15.62 in midday trading. The 14 percent drop in stock price comes after the data storage systems maker saw its shares soar from a year low of $6 in September to yesterdays $18.19 at closing.
While the companys revenue dropped from $260.8 million in last year's second quarter to $194.7 million in the same period this year, observers say that it was the flat revenue guidance for the next two quarters that made the stock come down this morning.
"The shares fell because the guidance wasnt what people were looking for, says Dan Renouard, an analyst with Robert W. Baird & Co. Inc.. "It was lower than expected."
Dan Warmenhoven, CEO of Network Appliance, blamed a faltering economy for the companys falling revenues and the transformation of its 2000 second-quarter net income of $34.4 million, or 10 cents per share, into a net loss of $11.2 million, or -3 cents per share. He couldnt raise guidance for the next two quarters, he said, because he didnt think the economy was going to get any better: I dont see a general rebound in the tech sector. I just dont see it.