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NetApp (NTAP) to Report Q2 Earnings: Here's What to Expect

NetApp NTAP is slated to release second-quarter fiscal 2023 earnings on Nov 29.

The company projects fiscal second-quarter non-GAAP earnings to be between $1.28 and $1.38 per share. The Zacks Consensus Estimate is pegged at $1.34 per share, suggesting a 4.7% decline from the year-ago quarter’s reported figure.

The company expects net revenues in the range of $1.595-$1.745 billion. The Zacks Consensus Estimate is pegged at $1.67 billion, suggesting growth of 6.8% year over year.

The company beat estimates in each of the last four quarters. It has a trailing four-quarter earnings surprise of 9.6%, on average.

NetApp, Inc. Price and EPS Surprise

NetApp, Inc. Price and EPS Surprise
NetApp, Inc. Price and EPS Surprise

NetApp, Inc. price-eps-surprise | NetApp, Inc. Quote

Factors to Note

Accelerating cloud migration and data-driven digital transformation by businesses across the globe are likely to have driven demand for NetApp’s product portfolio. The continuation of work-from-home and hybrid-work innovation are other driving factors. NetApp specializes in providing cloud services, systems and software to business organizations for optimal operations of applications from the data center to cloud.

NetApp’s strengthening go-to-market activities, various cloud collaborations and continued product innovation amid a robust demand environment are likely to have acted as additional tailwinds. Synergies from the buyouts of CloudCheckr and Data Mechanics bode well. NetApp’s recent buyouts include Fylamynt and Instaclustr.

For the fiscal second quarter, the Zacks Consensus Estimate for the Hybrid Cloud segment’s revenues is pegged at $1.52 billion. Strength in the company’s object storage and all-flash business is expected to have contributed to the Hybrid Cloud segment’s revenues in the to-be-reported quarter. Software product revenues are likely to have gained from the favorable mix shift to the all-flash portfolio.

For the fiscal second quarter, the Zacks Consensus Estimate for Public Cloud Services revenues is pegged at $151 million.

Renewed momentum in Spot by NetApp portfolio might have aided the Public Cloud Services business along with strong demand for other cloud solutions like Azure NetApp files, Cloud Volumes and Cloud Insights services. Spot by NetApp enables enterprises to make multi-cloud management easier and lower expenses at the same time. Incremental gains from an uptick in the company’s NetApp Astra solution and NetApp ONTAP data management software might have favored the top line.

However, unfavorable forex movements, lingering supply chain troubles and substantial increases in freight and logistical, and component costs are likely to have acted as headwinds.

What Our Model Says

According to the Zacks model, the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat.

NetApp has an Earnings ESP of -1.25% and a Zacks Rank #3. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Stocks to Consider

Here are some stocks that you may consider as our model shows that these have the right combination of elements to beat on earnings this season.

Lululemon Athletica LULU has an Earnings ESP of +4.91% and a Zacks Rank of 2 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Lululemon Athletica is set to release third-quarter fiscal 2022 results on Dec 8. The Zacks Consensus Estimate for earnings is pegged at $1.95 per share, suggesting an increase of 20.4% from the prior-year quarter’s reported figure. Shares of LULU have declined 21.3% in the past year.

Dollar General DG has an Earnings ESP of +1.58% and a Zacks Rank of 2 at present.

Dollar General is set to release third-quarter 2022 results on Dec 1. The Zacks Consensus Estimate for earnings is pegged at $2.55 per share, suggesting an increase of 22.6% from the prior-year quarter’s levels. Shares of DG have increased 14.7% in the past year.

Ulta Beauty ULTA has an Earnings ESP of +0.32% and a Zacks Rank of 3.

Ulta Beauty is scheduled to release third-quarter fiscal 2022 results on Dec 1. The Zacks Consensus Estimate for earnings is pegged at $4.08 per share, suggesting an increase of 3.6% from the prior-year quarter’s levels. Shares of ULTA have increased 9.2% in the past year.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.

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