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Aug 19 (Reuters) – Data storage equipment maker NetApp Inc reported better-than-expected quarterly adjusted profit and revenue as its focus on cloud-based storage products starts to pay off.
Shares of the company, which is in the middle of a restructuring, jumped 7.1 percent in extended trading on Wednesday as the company also forecast current-quarter profit and revenue above estimates.
NetApp, which faces strong competition from EMC Corp and newer flash-based storage vendors such as Nimble Storage Inc , has been trying to boost growth by focusing on high-margin cloud-based products as businesses cut spending on hardware storage systems.
“Our first fiscal quarter marks the beginning of a new chapter for NetApp,” said Chief Executive George Kurian, who took over the top job from Tom Georgens in June.
The company has overhauled its cloud product Data Ontap, which protects and manages data at both its customers’ data centers and cloud vendors such as Amazon.com Inc.
NetApp said in May it would lay off 500 employees as part of a restructuring plan to turn around slowing growth.
NetApp said it expects adjusted profit of 55-60 cents per share on revenue of $ 1.40 billion to $ 1.50 billion in the second quarter.
Analyst on average were expecting a profit of 46 cents per share on revenue of $ 1.39 billion, according to Thomson Reuters I/B/E/S.
For the first quarter, the company posted a loss of 10 cents per share due to special items such as stock-based compensation expense and restructuring charges.
Excluding those items, the company earned 29 cents per share, beating the average analyst estimate of 23 cents per share.
Revenue fell 10.3 percent to $ 1.34 billion in the first quarter ended July 31, but topped analysts’ average expectation of $ 1.32 billion.
NetApp’s shares closed at $ 29.78 on the Nasdaq on Wednesday. They have lost 28 percent in the past year. (Reporting By Lehar Maan in Bengaluru; Editing by Saumyadeb Chakrabarty)