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NetApp (NTAP) to Report Q3 Earnings: Here's What to Expect

NetApp NTAP is slated to release third-quarter fiscal 2023 earnings on Feb 22.

The company projects fiscal third-quarter non-GAAP earnings per share to be between $1.25 and $1.35. The Zacks Consensus Estimate is pegged at $1.31, suggesting a 9% decline from the year-ago quarter’s reported figure.

Net revenues are expected in the range of $1.525-$1.675 billion, indicating a year-over-year decline of 1% at the mid-point. The Zacks Consensus Estimate is pegged at $1.62 billion, suggesting growth of 0.1% year over year.

The company beat estimates in each of the last four quarters. It has a trailing four-quarter earnings surprise of 11%, 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 boosted 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. Healthy adoption of new product launches like NetApp BlueXP augurs well. NetApp BlueXP is a unified control plane that provides hybrid multicloud experience for data and storage services.

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. Synergies from the buyouts of CloudCheckr and Data Mechanics bode well. NetApp’s recent buyouts include Fylamynt and Instaclustr.

For the fiscal third quarter, the Zacks Consensus Estimate for Hybrid Cloud segment’s revenues is pegged at $1.46 billion. Strength in the company’s object storage and all-flash business is expected to have cushioned the segment’s revenues. Software product revenues are likely to have gained from the favorable mix shift to the all-flash portfolio.

For the fiscal third quarter, the Zacks Consensus Estimate for Public Cloud Services revenues is pegged at $153 million.

Weakness in global macroeconomic conditions and cutback in spending by clients are likely to have affected NetApp’s performance in the to-be-reported quarter. Unfavorable forex movements, lingering supply-chain troubles and substantial increases in freight and logistical, and component costs are likely to have acted as other headwinds.

What Our Model Says

Our proven model predicts an earnings beat for NetApp this time around. 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.

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NetApp has an Earnings ESP of +0.82% and a Zacks Rank #3. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Other Stocks to Consider

Here are a few stocks that you may want to consider, as our model shows that these too have the right combination of elements to post an earnings beat this time around.

Clearway Energy CWEN has an Earnings ESP of +77.19% and presently sports a Zacks Rank #1. The company is slated to release quarterly numbers on Feb 23. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate are pegged at a loss of 88 cents per share and $313.2 million for revenues, respectively. Shares of the company have lost 0.6% in the past year.

IMAX Corporation IMAX has an Earnings ESP of +13.33% and presently carries a Zacks Rank #2. The company is slated to release quarterly numbers on Feb 22.

The Zacks Consensus Estimate for IMAX’s to-be-reported quarter’s earnings and revenues are pegged at 15 cents per share and $96 million, respectively. Shares of the company have lost 16.8% in the past year.

Lucid Group, Inc LCID has an Earnings ESP of +3.90% and currently carries a Zacks Rank #2. LCID is slated to release quarterly numbers on Feb 22.

The Zacks Consensus Estimate are pegged at a loss of 39 cents per share and $289.8 million for revenues, respectively.

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

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NetApp, Inc. (NTAP) : Free Stock Analysis Report

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