NetApp Inc. (NASDAQ: NTAP), a provider of storage systems and data management solutions for information technology (IT) infrastructures, reported a 34% drop in its second-quarter earnings as higher costs hurt the company’s bottom-line. However, the company’s adjusted earnings for the quarter beat Street estimates, sending shares sharply higher in trading on Thursday.
For the second quarter ended October 26, 2012, NTAP reported GAAP net income of $110 million, or $0.30 per share, down from $166 million, or $0.44 per share reported for the same period in the previous year. The company’s non-GAAP net income for the quarter was $189 million, or $0.51 per share, compared to $236 million, or $0.63 per share. Analysts were expecting the company to report adjusted earnings of $0.48 per share.
Revenue for the quarter came in at $1.54 billion, representing an increase of 2.3% over the same period in the previous year. The company’s revenue for the quarter came in-line with its guidance range of $1.5 billion to $1.6 billion.
The company’s product sales for the quarter were down 2%. Software segment revenue, meanwhile, climbed 11%. Service segment revenue also rose 11%.
Tom Georgens, President and CEO of NetApp, said that NTAP produced healthy financial results in the second quarter with revenue roughly at the mid-point of and earnings per share above the company’s guidance range, despite a difficult environment. Georgens added that the company saw a strong uptake of NetApp® Data ONTAP® 8 and clustered Data ONTAP, as customers are looking to build agile data infrastructure environments with intelligent data management, nearly unlimited scalability and non-disruptive operations.
For the third quarter, NTAP expects adjusted earnings to be between $0.53 per share and $0.58 per share. Revenue for the quarter is expected to be between $1.58 billion and $1.68 billion. Analysts expect the Sunnyvale, California-based company to report adjusted earnings of $0.54 per share and revenue of $1.62 billion in the third quarter.
NTAP shares rose to an intra-day high of $30.80 on Thursday. At last check, the stock was trading 10.73% higher at $30.03 on above average volume of 7.80 million.