SAN FRANCISCO (Reuters) - NetApp Inc (NTAP.O) on Wednesday forecast revenue below Wall Street’s expectations and its chief executive warned of uncertainty in Europe, sending the data storage equipment maker’s shares down 18 percent in after-hours trade.
The day before, Dell Inc DELL.O posted disappointing quarterly results that heightened concerns about cautious IT spending, sending tech stocks sharply lower.
“The EMEA (Europe, Middle East, Africa) story is one of uncertainty. We could be seeing a rebound or we could be seeing a strong degradation from there,” CEO Tom Georgens said in a telephone interview.
“It’s time for us to be cautious,” he added.
Georgens later said on a conference call with analysts that because of a economic uncertainty, NetApp would not provide guidance for full-year fiscal 2013.
The growing popularity of mobile gadgets like Apple’s iPhone, which access remote computing power and data over the Internet, has fueled demand for storage products sold by NetApp and rivals like EMC Corp EMC.N.
But NetApp’s growth has been affected this year by weak spending by U.S. military and intelligence agencies, which are major customers.
A sizeable amount of NetApp’s sales also comes from Europe, where a debt crisis has shaken confidence in the economy and policy-makers fear Greece could pull out of the euro zone.
“European macro is weak right now in May and it only gets worse as we head into the summer months, which historically are the weakest period of the year,” said Piper Jaffray analyst Andrew Nowinski.
Also on Wednesday, Hewlett Packard Co (HPQ.N) said it would lay off roughly 27,000 employees to cut costs.
New product launches from EMC are expected to add more pressure on NetApp in the July quarter.
Concerns about enterprise spending have helped send shares of NetApp 30 percent lower since the end of March - not including Wednesday’s after-hours sell-off. The shares have traded recently around 12 times expected earnings.
Sunnyvale, California-based NetApp posted fiscal fourth-quarter revenue of $1.70 billion, compared with $1.43 billion in the year-ago period.
NetApp said it expects current-quarter revenue to be in the range of $1.40 billion to $1.50 billion. Analysts had expected $1.684 billion in revenue for the quarter ended in April and $1.606 billion for the quarter ending in July, according to Thomson Reuters I/B/E/S.
NetApp reported fourth-quarter net income of $181 million, or 47 cents a share, compared with $161 million, or 40 cents a share, in the same quarter last year.
Adjusted earnings per share were 66 cents, versus expectations of 63 cents.
The company said current-quarter non-GAAP earnings per share would be between 34 and 39 cents per share.
Shares of NetApp were down 18.26 percent at $26.86 in extended trading, recovering a little from an earlier after-hours decline of about 22 percent. They closed down 1.3 percent at $32.86 in the regular session on the Nasdaq.
Reporting by Noel Randewich; Editing by Carol Bishopric, Matthew Lewis and Steve Orlofsky