NetApp Shows Strong Storage Hardware Sales

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In its latest quarterly earnings release NetApp ( NTAP ) reported total revenue growth of 11% sequentially to $1.4 billion. The product revenue (comprising primarily of storage hardware) grew 14% sequentially to about $960 million, the second highest sequential growth rate in the past 5 years. NetApp is the third largest player in the external disk storage market behind EMC ( EMC ) and IBM (NYSE:IBM).

We have a $54.93 Trefis price estimate for NetApp's stock , about 5-10% above the stock's market price.

Strong Growth in NetApp's Storage Hardware Market Share

NetApp reported its total units shipped were up 29% year-over-year despite material constraints through the middle of the quarter. For the entire fiscal year, the firm posted a 30% revenue growth and the largest market share gains in its history.

On geographic basis, EMEA grew 15%, Asia-Pacific grew 21%, Americas grew 14% and the U.S. Public Sector an incredible 73%. The U.S. Public Sector business remains particularly robust as virtualization and cloud deployments remain a broad governmental priority and offers tremendous business potential to NetApp. (See HP Could Gain as Government Shifts to Cloud )

The firm is projecting $1.5 billion in Q1'12 estimating continued growth in storage hardware as well as the inclusion of revenues from the recently acquired Engenio business.

We currently forecast a 0.25% growth NetApp's market share of external disk storage gigabytes in 2011. However if NetApp's market share continues to grow at a rapid rate driven Engenio acquisition and U.S. governments shift to Cloud, there could be significant upside to our $54.93 Trefis price estimate for NetApp . (See NetApp's Engenio Acquisition Should Lift Market Share)

See our full analysis of NetApp



The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: Investing , Investing Ideas , Stocks , US Markets

Referenced Stocks: AAPL , DELL , EMC , NTAP

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