The manufacturer of storage systems NetApp has summed up 2017 fiscal year. The company returned to profit in large part due to strong sales of storage based on flash memory.
Following the results of the fourth quarter of the financial year, closed on April 28, 2017 calendar, NetApp's revenue reached $ 1.48 billion from $ 1.38 billion a year ago.
Net income was $ 190 million, or 68 cents per share, whereas in February-April 2016 there were net losses of $ 8 million, or 3 cents per share.
Adjusted earnings that do not take into account one-time costs (for example, personnel reorganization) amounted to 86 cents per share, while analysts surveyed by FactSet expected the figure at 82 cents at $ 1.44 billion.
NetApp raised $ 5.52 billion for all fining, which is almost the same as a year ago. Net profit has more than doubled - up to 509 million dollars. The revenue growth was largely due to storage devices based on flash memory, the annual sales of which jumped by 140%, reaching $ 1.7 billion.
NetApp has to work in the face of strong competition from EMC and young market players such as Nimble Storage and Pure Storage, which offer low-cost storage devices based solely on flash memory (All-flash). In addition, the pressure is exerted by the growing popularity of cloud solutions, which weaken the demand for traditional data storage methods - with the help of equipment. As a result, NetApp revenue is declining, forcing the company to optimize costs by reducing the number of employees.
In November 2016, NetApp reported a staff reduction of 6% (640 people). Dismissals will be held until the end of April 2017, and the costs for them in the company were estimated at $ 50-60 million.
In late summer 2015, NetApp announced the reduction of 500 jobs (about 4% of the staff).
About the same number of layoffs, the company reported in May of the same year. A year before the work lost 600 employees. In February 2016, NetApp announced the withdrawal of 1,500 employees, cuts were completed in July.
At the end of the current quarter, NetApp expects adjusted earnings in the range of 49 to 57 cents per share, below the average forecast of Wall Street analysts (66 cents). A weak forecast led to a 5 percent drop in the company's quotes on the day of publication of the financial statements.