NetApp Inc Posts Loss in First Quarter Owing to Product Overhaul and Reorganization
The data-storage company, NetApp Inc. headquartered in Sunnyvale, California reported a loss in the first quarter. In its 'transition year' as its executive call it, the product revenue dipped sharply as it went through a major overhaul in products.
The company logged $27 million costs that were linked to the restructuring which was announced earlier.
NetApp Inc's product revenue dropped to $664 million, which was twenty seven percent less as compared to the previous quarter and twenty five percent lesser than what it had posted in the same quarter one year ago.
The dip was majorly linked to a turn down on sales of Data ONTAP 7-Mode. The company is making an effort to shift its customers to its most recent storage operating system which is clustered Data ONTAP or cDOT.
Company officials however say that the product revenue would recover in the second quarter back to the company's target operating margin of eight to twenty percent in the second half of the year.
Chief Executive George Kurian said "The IT industry as a whole is going through fundamental change as enterprises transform themselves with digital capabilities. Data is at the heart of these transformations. Our first fiscal quarter marks the beginning of a new chapter for NetApp."
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