Shares of Network Appliance jumped more than 11 percent during Wednesday's trading after the storage maker reported a robust 38 percent rise in first quarter revenue.
On Tuesday, NetApp posted revenue of $358m - a figure well ahead of the $261m posted in the same period last year. Income also surged, rising 73 percent to $47m up from $27m last year. The company's results back up strong recent performances from EMC and Dell to show overall strength in the storage market.
"NetApp demonstrated exceptional execution, a strong balance sheet, and continued cash generation during the quarter," said NetApp CEO Dan Warmenhoven. "Our focus is on expanding our market share and our results demonstrate that the market is continuing to move toward us."
While NetApp barely beat analysts' first quarter expectations, it provided a rosy outlook for the coming quarter which appeared to please investors. The vendor is looking for second quarter revenue to come in 4 percent to 6 percent higher than the Q1 total on the back of solid gains in Asia. Shares of NetApp hit as high as $19.50 during today's trading and held the gains, as the stock price sat at $19.44 just ahead of the market close.
NetApp has specialized in IP-based storage systems and dominated the market for NAS (network attached storage) boxes. Over the past couple of years, it has been trying to produce higher-end kit that can compete better against the Fibre Channel-based systems sold by EMC and others.
EMC posted a 33 percent revenue gain in its most recent quarter and partner Dell showed 60 percent growth. Both vendors helped promote the notion that a slump affecting large software sellers has not carried over to the hardware market. HP, however, deadened some of this excitement with dismal storage results in its third quarter, although HP's woes had more to do with operational issues than a general slowdown in hardware spending.
NetApp closed a number of deals during its first quarter, including shipments to Audi AG, Canon, Catholic Healthcare West, China Everbright Bank, Ciena, City of Concord and ConocoPhillips. ®