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Technology Stocks : Son of SAN - Storage Networking Technologies -- Ignore unavailable to you. Want to Upgrade?

To: Gus who wrote (4176)	11/14/2001 8:53:30 AM
From: jad	Respond to of 4808

Network Appliance (NTAP) 18.19 +0.71: 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

To: Gus who wrote (4176)	11/14/2001 4:34:05 PM
From: Sam	Read Replies (2) \| Respond to of 4808

Another take on the NTAP report: from GS: *NETAPP CONTINUES TO MAKE GOOD PROGRESS IN SHIFTING ITS VERTICAL MARKETS TO AREAS OF OPPORTUNITY. NetApp has done a credible job in shifting its business away from the Internet, telecom and technology space and into more traditional enterprises. Its approach here has been methodical and includes the hiring of industry experts and the shifting of sales resources to better opportunity markets. Success has been evidenced by penetration of the energy and gas markets, which could represent close to 10% of sales this year, and new traction in financial services. In short, NetApp has both extended the number of key enterprise markets that it is concentrating on at the same time that it has grown revenues in those markets. This segment, now representing 40% of revenues, up from 15% last year, nearly doubled from last year in the current quarter. Conversely, the Internet segment declined from 40% of sales last year to 15% in the October quarter, although the quality of the customers has been significantly enhanced, with Yahoo and Oracle.com two major customers. The following table demonstrates the progress that NetApp is making in its ongoing move to broaden and diversify its customer base. .....................Percent of revenue..Oct Quarter Change ........................Oct-00,Jul-01,Oct-01..Qtr/Qtr,Yr/Yr Enterprise................... 15% 25% 40% +55% +99% Technology, comm's, and other 45% 55% 45% -21% -25% Internet..................... 40% 20% 15% -27% -72% Total revenue............... 100% 100% 100% -3% -25% Source: Network Appliance; Goldman Sachs Research estimates. Message 16658423 (thanks, jacob) Sam