NetApp earnings soar, shares drop after release leak

Data storage vendor records 72% jump in Q2 net profit; trading halted following premature report

Maybe the logistics of the announcement went awry, but NetApp and its shareholders should be happy with the details of the data storage company's fiscal second-quarter performance.

NetApp (NASDAQ: NTAP) reported earnings of $164.6 million, or 42 cents a share, a 72 percent increase over last year's Q2 net profit of $95.7 million, or 27 cents a share. The company's sales were $1.2 billion, 32 percent better than the $910 million a year ago. Adjusted income for the second quarter was 52 cents a share.

Consensus estimates called for net income of 49 cents a share on sales of $1.2 billion.

However, the company's forecast for fiscal Q3 appeared to disappoint investors, with expected adjusted earnings of 48 cents to 50 cents a share falling short of consensus predictions of 51 cents a share.

This caused shares to tumble 3.44, or 6.5 percent, to 49.25. But not in after-hours trading -- this was in the last hour of Wednesday's regular trading session. And that's because the Q2 results were leaked about an hour before the day's final bell, instead of being announced by the company immediately after trading concluded, as is the norm.

NetApp Chief Financial Officer Steve Gomo told MarketWatch that "someone improperly accessed the restricted area of our Web site.” Trading was halted after shares dropped. In after-hours trading, NetApp gained 1.04, or 2.1 percent, to 50.29.

It'll be interesting to learn -- assuming we ever find out -- whether that "someone" was an employee or an outsider. If it were an employee, it's a firing offense, I would think. And if it were an outsider, I'd say it's a good thing NetApp isn't a security software vendor. It'd be hard to explain away that one.

Chris Nerney writes about the business side of technology market strategies and trends, legal issues, leadership changes, mergers, venture capital, IPOs and technology stocks. Follow him on Twitter @ChrisNerney.

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