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Technology Stocks : Network Appliance -- Ignore unavailable to you. Want to Upgrade?

To: Uncle Frank who wrote (10253)	8/13/2002 8:19:27 PM
From: straight life	Respond to of 10934

Network Appliance posts profit, sees some good signs By Peter Henderson (Adds details, updates stock price) SAN FRANCISCO, Aug 13 (Reuters) - Data storage computer maker Network Appliance Inc. (NasdaqNM:NTAP - News) on Tuesday posted a first-quarter profit and projected a slight rise in revenue in the current quarter among muted signs of economic improvement. Sunnyvale, California-based Network Appliance Chief Executive Dan Warmenhoven in a conference call said that sales to high tech companies had not eroded for the first time in four quarters and noted a small easing in price competition but he expected a slow economic recovery. Network Appliance shares rose 10 percent in after hours trade following news of the results, which met company guidance, and as Warmenhoven said the next quarter would be marginally better as revenue rose modestly. The company, which makes data storage devices that hook into traditional computer networks, easing the burden on servers managing the networks, also said it had hired a new chief financial officer and that former CFO Jeff Allen would take charge of business operations in a new position. Network Appliance posted a fiscal-quarter profit of $16.2 million, or 5 cents per share, compared with a net loss of $500,000, or nil cents per share, in the year-ago quarter. Excluding one-time items, the company reported a profit of $18.0 million, or 5 cents per share, compared with a profit of $4.7 million, or 1 cent per share, in the year-ago quarter. Revenue rose to $206.8 million from $200.43 million in the July-ending quarter a year earlier. Analysts polled by Thomson First Call had forecast earnings of 4 cents per share and revenue in the middle of the company's forecast range of $205 million to $215 million. Shares of Network Appliance rose to $7.76 after hours on Instinet from a close of $7.05 on Nasdaq, where they had fallen 5 percent, or 37 cents, before the earnings announcement. Bill Lewis, an analyst at JPMorgan, said the company had done well in its most difficult quarter and produced an optimistic outlook for the second. "It is a tough environment. ... That they deliver EPS upside and guided to (revenue) growth next quarter is good in this environment," he said. TROUBLE IN GERMANY Warmenhoven in a telephone interview forecast that second-quarter revenue would rise by 2 percent to 5 percent from the first quarter ended July 26 and earnings per share would be "pretty flat." "Our view is a cautious optimism," he said, adding that spending was still tight. Warmenhoven said first-quarter sales had declined in Europe, especially in Germany, and that sales of its caching products had declined. The company managed expenses and dealt with an approximately $800,000 negative currency conversion impact from unexpected strength of the euro, and kept profit margins higher than Wall Street expected, he said. (edit- hmm... if the euro was strong, then wouldn't it have been a positive currency conversion: the stronger euro buying more dollars???) Warmenhoven said the company's traditional market, Internet companies, had declined about as far it could. But Network Appliance had made up for that weakness with sales to more traditional industries. "The strength has really come from financial services, oil and gas. Telco has been lumpy ... but is trending in the right direction," he said. The company also announced that it had hired Steve Gomo, a former Hewlett-Packard Co and Gemplus International executive, as chief financial officer, replacing Allen, who was named an executive vice president. biz.yahoo.com