NetApp Suffers the ‘March Slowdown’
NetApp Suffers the ‘March Slowdown’
May 29, 2007: NetApp has forecasted a downturn in revenue, attributing a slowdown in the growth it experience last year to a general ‘March macroeconomic spending slowdown’ in the US.
The unexpected move has the company now expecting its first quarter results to drop 6 – 7 percent from its fourth quarter posting.
Last week, the announcement saw its stock price take a nose dive as NetApp said it expects revenue growth for the year to be somewhere between 20 and 21 percent, a far cry from the close the 30 percent expected from analysts.
NetApp CEO Dan Warmenhoven told US based Byte and Switch during a conference call that ‘everything kind of slowed down’ during the month of March, stating the company is far from immune from the macroeconomics forces affecting all US vendors.
When Warmenhoven was questioned during the conference call if NetApp is coming under pressure from larger vendors such as IBM and EMC, he responded that NetApp had maintained its percentage of wins and ‘it had nothing to do with any competitor.’
NetApp reported revenues for the fourth fiscal quarter were US$801.2 million an increase of 34 percent when compared to the US$598 million figure reported the year before and a 10 percent increase from the US$729.3 million in the prior quarter.
“While we weren’t immune from the March macroeconomic spending slowdown, our competitive differentiation and business fundamentals have never been stronger,” said Waremenhoven in a statement on the figures.