Network Appliance, Inc. (Nasdaq: NTAP) rose US$3.06 to $38.25 in morning trading Friday after the network storage companyreported stronger-than-expected earnings for the third quarter ended January 31st.
Prudential Securities reportedly repeated a strong buy rating on NetworkAppliance shares after the report, while CE Unterberg Towbin reportedly upgradedthe stock to strong buy from buy. However, Banc of America Securities was saidto have lowered its rating on the stock from strong buy to buy.
“During the quarter, Network Appliance continued to execute on its businessstrategy to fundamentally change the way companies architect theirenterprise storage and content delivery systems,” said chief executiveofficer Dan Warmenhoven. “Storage is a strategic IT [information technology] investment and remains apriority for today’s leading corporations.”
Pro forma income rose 95 percent from a year earlier to US$38.9 million, or 11cents per share, a penny better than analysts expected. Net income totaled$34.1 million, or 9 cents per share, up from $19.8 million, or 6 cents.
Revenue rose 91 percent to $288.4 million, a total that reports said was slightlybelow expectations. Company officials on a conference call reportedly toldanalysts that sales for the current quarter would be at the low end of theexpected 10 to 15 percent growth range.
The company said it signed contracts during the quarter with companiesincluding Airbus Industrie, BT Ignite, Deutsche Telekom, Oracle, TexasInstruments and Vignette. In addition, Network Appliance said, its systems were included on Microsoft Corp.’s hardware compatibility list.
Network Appliance shares plunged to a 52-week low of $34.50 on Thursday, asshares of Cisco Systems, Inc. (Nasdaq: CSCO), one of the company’s biggestcustomers, continued to fall following a weak quarterly report.
Network Appliance shares are down from a 52-week high of $152.75. The stockhas fallen, along with others in the technology sector, as companies reassesstheir spending plans in light of a slowing economy.