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 companyâ€™s bottom-line. However, the companyâ€™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 companyâ€™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 companyâ€™s revenue for the quarter came in-line with its guidance range of $1.5 billion to $1.6 billion.
The companyâ€™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 companyâ€™s guidance range, despite a difficult environment. Georgens added that the company saw a strong uptake of NetAppÂ® Data ONTAPÂ® 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.