NTAP ($18.70-$17) Cap=$6bil The stock is down $1.50 after the bell as the company guided down a bit for JanQ. OctQ results were roughly in-line.
For JanQ, sales are expected to be flat with OctQ, which computes to the company guiding down to $195 mln vs Multex consensus of $206 mln. The good part of the call is that backlog is increasing and is expected to increase over the next quarter or two. The problem is that shipments are expected to be lower than orders as deferred revenue builds up. While the company did not get too specific on its call, the concern with NTAP is that pricing pressure is likely to increase on multiple fronts. Thomas Weisel Parnters sees pressure from EMC/Dell deal on mid-range market, Veritas ramp with Sun and Compaq hardware platforms; new private competitors such as BlueArc, public competitors in addressed sectors such as CacheFlow; also, the firm says that the blending of SAN/NAS may leave Netapp out in the cold. Finally, NetApp will have difficulty gaining share in database, as performance issues are too great and initial tractions are likely to stall....Overall IT spending is a concern. According to market surveys, 2002 IT spending is expected to be flat to down from 2001, with normal IT spending patterns not resuming until late 2002 or 2003. With overall IT budgets shrinking, Windows 2000-related offerings, security software, and Unix servers top the priority list....In general, the storage market has still not shown signs of a bottom. The long term view on the NAS market looks favorable, but Briefing.com remains cautious as the stock has tripled off its low in September. Also, with the company slated to earn only $0.20 next year, valuation is a concern with no catalysts in sight. -- Robert J. Reid, Briefing.com |
