UPDATE 2-NetApp CEO sees revenue up 15-20 percent in '09
(Adds CEO, COO comments, bylines; dateline SAN FRANCISCO)
By Philipp Gollner and Jim Finkle
SAN FRANCISCO/BOSTON, March 11 (Reuters) - Data storage equipment maker NetApp Inc (NTAP.O) said on Tuesday it expects fiscal 2009 revenue to climb 15 percent to 20 percent from the prior fiscal year, in line with analysts' expectations.
Chief Executive Dan Warmenhoven said at a company analyst meeting that he expects NetApp to outperform the overall market, which he estimated will grow by 5 percent to 7 percent during the period. NetApp's fiscal 2009 begins April 28, 2008.
Analysts, on average, have been expecting revenue of $3.9 billion, according to Reuters Estimates, or a 17.7 percent increase from their forecast of $3.3 billion for fiscal 2008.
NetApp executives told analysts the company plans to hire about 1,200 to 1,300 people in the next year as it tries to sell more products and services in fast-growing new markets as well as to existing customers. NetApp had about 7,120 employees at the end of January.
"We have a vast under-tapped market out there," Chief Operating Officer Tom Georgens told Reuters in an interview. "We could drive our growth at a much higher rate."
NetApp disappointed investors in February when it forecast weaker-than-expected fiscal fourth-quarter revenue of $915 million to $945 million. The company blamed slowing orders by banking clients including France's Societe Generale SA (SOGN.PA).
Banks had been NetApp's largest customer segment, but the company now expects the technology sector and the U.S. federal government to overtake financial services as banks cut back due to the worsening mortgage and credit crisis, Warmenhoven said.
The Sunnyvale, California-based company's February forecast revived concerns that technology spending may be hurt by a recession or slowdown in the United States.
NetApp on Tuesday affirmed its February forecast for the current quarter and said spending by banking customers had not improved from the third quarter.
"We're seeing it pretty consistent with last quarter," Warmenhoven told Reuters in an interview. "We haven't seen any perceptible difference in buying or in the pipeline."
"We assume that the forecasts of most of the economists are basically holding true," he added. "We assume no fundamental change in the economic environment until the end of the calendar year."
NetApp shares rose 3.3 percent on Tuesday to $22.20. They had fallen 6.7 percent through Monday after giving its forecast on Feb. 13.
Rivals of NetApp, formerly known as Network Appliance Inc, include EMC Corp (EMC.N), Hewlett-Packard Co (HPQ.N), International Business Machines Corp (IBM.N) and Sun Microsystems Inc JAVA.O. IBM also resells NetApp equipment and accounts for about 5 percent of NetApp's total revenue. (Editing by Derek Caney, Phil Berlowitz)
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