Network Appliance (Nasdaq: NTAP) fell US$1.92 to $14.64 Thursday morning after the company, which makes network storage products, lowered its revenue and earnings outlook for the quarter ending April 27th.
“The direction of the global economy remains uncertain, and as our current quarter progresses, we have experienced greater delays in customer orders than anticipated,” said Dan Warmenhoven, chief executive officer of the Sunnyvale, California-based company.
Network Appliance said that it expects revenue for the quarter to come in 20 to 25 percent below the previous quarter’s $288.4 million, with pro forma earnings of 1 to 3 cents per diluted share.
Analysts were reportedly looking for per-share earnings of 10 cents and revenue of $307 million.
The company said it is taking steps to cut costs, including reducing contract and temporary staff.
“We are selectively hiring in sales and will continue our strategic investments in [research and development] to strengthen Network Appliance’s position in the marketplace,” Warmenhoven said.
In February, Network Appliance reported stronger-than-expected results for the third quarter ended in January, posting a 91 percent increase in revenue and a 95 percent gain in pro forma income.
The company said that it signed contracts during the quarter with companies including Airbus Industrie, BT Ignite, Deutsche Telekom, Oracle, Texas Instruments and Vignette. In addition, Network Appliance said, its systems were included on Microsoft’s hardware compatibility list.
“Despite the current economic challenges, we continue to see strong customer interest in our data management, storage and content delivery solutions,” Warmenhoven said in announcing the latest forecasts. “With an improving economy, we expect customer demand to return to healthier levels.”