Network Appliances Big Quarter NTAP
Network Appliances (NTAP) announced a good quarter and its stock dropped, proving there is no justice on Wall Street. The developer of advanced network storage systems saw revenue up 32% to $589 million. Revenue for the fiscal year rose 29% to nearly $2.1 billion. This is a trend, mind you. In fiscal 2004, revenue rose 31% and in fiscal 2005, it was up by 36%.
The company guided for the upcoming year to be good again. "Network Appliance estimates that growth in revenue for the first quarter of fiscal year 2007 will be in the range of 2% to 4%, which translates to 36% to 39% growth year-over-year". So, the company thinks it can keep its growth pace for a fourth year.
Income from operations for the quarter rose from $70 million a year ago to $87 million. But, the company had a non-recurring tax charge of $22.5 million. Based on the company's reported non-GAAP measures, income from operation rose from $70 million to $96 million, or 37%.
At $32.25, the stock is at the higher end of its 52-week range of $38.50 and $22.50.
But, there are those who think the stock is expensive. An S&P analyst quoted at Forbes.com thinks the shares have had their run. "We think Network Appliance remains well positioned to take advantage of growth opportunities within the data storage market wrote analyst Richard Stice. But he added that these advantages are already factored into company shares, which are trading at a "notable premium' to the S&P 500".
With a performance like the one just turned in, the wisdom here may well be wrong. The number of large tech companies growing at a rate of around 35% is relatively small. Network Appliances has a ways to run.
Douglas A. McIntyre
The company guided for the upcoming year to be good again. "Network Appliance estimates that growth in revenue for the first quarter of fiscal year 2007 will be in the range of 2% to 4%, which translates to 36% to 39% growth year-over-year". So, the company thinks it can keep its growth pace for a fourth year.
Income from operations for the quarter rose from $70 million a year ago to $87 million. But, the company had a non-recurring tax charge of $22.5 million. Based on the company's reported non-GAAP measures, income from operation rose from $70 million to $96 million, or 37%.
At $32.25, the stock is at the higher end of its 52-week range of $38.50 and $22.50.
But, there are those who think the stock is expensive. An S&P analyst quoted at Forbes.com thinks the shares have had their run. "We think Network Appliance remains well positioned to take advantage of growth opportunities within the data storage market wrote analyst Richard Stice. But he added that these advantages are already factored into company shares, which are trading at a "notable premium' to the S&P 500".
With a performance like the one just turned in, the wisdom here may well be wrong. The number of large tech companies growing at a rate of around 35% is relatively small. Network Appliances has a ways to run.
Douglas A. McIntyre
posted by douglas mcintyre at 9:59 AM
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