Will NetApp (NTAP) Miss Q2 Earnings? - Analyst Blog

By
A A A

NetApp Inc. ( NTAP ) is set to report second-quarter 2014 results on Nov 13. The company delivered a positive earnings surprise of 8.82% in the first quarter. Let's see how things are shaping up for this announcement.

Factors This Past Quarter

NetApp reported mixed first-quarter results wherein the bottom line beat the Zacks Consensus Estimate but the top line lagged the same. Although NetApp's year-over-year comparisons were favorable, the company reported sequential declines in revenues. Moreover, operating expenses increased sequentially. The year-over-year growth was primarily driven by higher branded revenues while original equipment manufacturer (OEM) revenues declined.

Moreover, weak demand environment and competition from EMC Corp. 's ( EMC ) storage platform remain the concerns for the company.

Earnings Whispers?

Our proven model does not conclusively show that NetApp will beat earnings this quarter. That is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1, 2 or 3 for this to happen. That is not the case here as you will see below.

Negative Zacks ESP:   The Most Accurate estimate stands at 42 cents, while the Zacks Consensus Estimate is higher at 48 cents. That is a difference of -12.5%.

Zacks Rank #4 (Sell): We caution against stocks with Zacks Ranks #4 and 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions momentum.

Other Stocks to Consider

Here are some other companies you may want to consider as our model shows they have the right combination of elements to post an earnings beat this quarter: 

Best Buy Co., Inc. ( BBY ), with Earnings ESP of +18.18% and a Zacks Rank #1 (Strong Buy).

Dish Network Corp. ( DISH ), with Earnings ESP of +4.76% and a Zacks Rank #2 (Buy).



BEST BUY (BBY): Free Stock Analysis Report

DISH NETWORK CP (DISH): Free Stock Analysis Report

EMC CORP -MASS (EMC): Free Stock Analysis Report

NETAPP INC (NTAP): Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research



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 , Business , Earnings , Stocks

Referenced Stocks: BBY , DISH , EMC , NTAP

Zacks.com

Zacks.com

More from Zacks.com:

Related Videos

Your Car Is Spying on You
Your Car Is Spying on You           

Stocks

Referenced

Most Active by Volume

73,078,214
  • $30.33 ▼ 3.90%
57,046,796
  • $15.52 ▲ 0.45%
51,290,831
  • $100.57 ▲ 0.04%
39,855,468
  • $8.13 ▲ 1.37%
31,693,544
  • $5.50 ▲ 20.35%
31,532,510
  • $10.33 ▲ 0.78%
31,526,753
  • $39.10 ▲ 47.21%
28,366,542
  • $26.36 ▲ 1.19%
As of 8/20/2014, 04:04 PM

Find a Credit Card

Select a credit card product by:
Select an offer:
Search
Data Provided by BankRate.com