SAN FRANCISCO – Network Appliance Inc. (NTAP) Wednesday posted a profit in line with its lowered forecast and issued current-quarter and full-year profit outlooks higher than Wall Street expectations, sending shares up more than 7 percent.
The data storage equipment maker said net income for its first fiscal quarter rose 28 percent to $60.1 million, or 16 cents per share, compared with net income of $46.9 million, or 13 cents a share for the same period in the prior year. Excluding items, its profit was 16 cents a share.
Over the past decade, Network Appliance, which pointed to market share gains in the just-completed quarter, has popularized the market for network-attached storage (NAS), which is used by companies to store vast amounts of documents and other data so it can be shared among employees.
"We continue to grow significantly faster than the storage market and gain share," said Dan Warmenhoven, Network Appliance Chief Executive, in a statement.
Network Appliance and rival EMC Corp. (EMC) are nearly equal in the storage market, together counting for about 75 percent of industry sales. EMC partners with Dell Inc. (DELL), while Network Appliance has teamed up with International Business Machines Corp. (IBM).
Revenue rose 25 percent to $448.4 million from $358.4 million.
Network Appliance joins other data storage equipment vendors in posting double-digit year-over-year revenue growth in their most recent quarters, and Warmenhoven suggested that the storage market could be heating up.
"It could be that the market is getting much stronger than anybody had forecasted at this point," Warmenhoven said on a conference call with analysts to discuss the results.
Analysts' average estimates had called for earnings of 15-1/2 cents a share before items on revenue of $447.4 million, according to Reuters Estimates.
Looking ahead, the company forecast fiscal second-quarter earnings of 18 cents to 19 cents a share, before items.
Its full-year forecast called for earnings before items of 76 cents to 79 cents a share.
Analysts' consensus estimates had called for per-share earnings before items of 18 cents in the second quarter and 73 cents for fiscal 2006.
Shares of Network Appliance rose 7.1 percent to $26.27 in after-hours trade on Inet. Shares of Network Appliance rose 83 cents, or 3.5 percent, to close at $24.52 on Nasdaq.