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NetApp has been forced to lower its revenue and earnings targets for the first quarter, joining a growing list of storage vendors struggling with a tough spending climate. (See NetApp Reports Preliminary Q1, Overland Struggles With 'Softness', HP's Storage Slowdown, and Storage Shades Sun's Q4.)
The vendor, which will release quarterly results on August 15th, now expects first quarter revenues between $684 million and $688 million, down approximately 14 percent to 15 percent on the previous quarter. Although this figure is 10 percent to 11 percent higher than the year-ago quarter, NetApp had originally forecast revenues in the region of $745 million to $753 million.
On a GAAP basis, NetApp also lowered its first quarter earnings forecast to between 8 and 9 cents, compared to its previous target of 14 and 15 cents. Non-GAAP earnings are expected to be between 19 and 20 cents, down from 24 to 25 cents.
The move is the second time NetApp has lowered its first quarter guidance, and it reflects current trends in the enterprise storage market overall, according to NetApp execs. (See Storage Spending Knocks NetApp.)
Chief among these is a slowdown in enterprise spending on disk storage in the U.S. and Western Europe. "I really believe that the overall [disk] storage market has in fact slowed versus last year," said NetApp CEO Dan Warmenhoven on a conference call last night. He admitted that he is not happy with the vendor's performance. "We're obviously very disappointed with the results of our first quarter."
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