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Net App Announces Flat Q1, Layoffs

Network Appliance Inc. (Nasdaq: NTAP) announced its first-ever layoffs, a cost-cutting measure the company said was "very difficult" but necessary, as it tries to cope with the continued worldwide slowdown in storage-related IT spending.

When the network-attached storage vendor announced its first-quarter fiscal 2002 results Tuesday, it said it would cut 200 jobs worldwide, from its current headcount of 2,400 employees. The company lost $500,000 during the quarter, which it said resulted in a break-even performance on a per-share basis. In the same period a year ago, Network Appliance earned $5 million, or 1 cent per share.

Revenues for Net App's first fiscal quarter were $200.4 million, compared to revenues of $231.2 million for the same period a year ago, according to the company. Earlier this month, consensus analyst estimates from First Call had predicted revenues of about $214 million for the quarter (see Goldman Wary on Net App).

In a conference call announcing the results, CEO Dan Warmenhoven said the company hopes to see a spending recovery sometime soon but isn't ready to say it's happening yet.

"At the risk of sounding like a recording from last quarter, we think we've found the bottom," said Warmenhoven. Net App, however, doesn't think customer spending will get off the ground within the next quarter, as the company said it expects flat or slight revenue growth, in the zero to 5 percent range, for the ongoing second quarter.

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