Revenue down 16%
Storage and data management company NetApp has announced plans to cut jobs after posting a net loss of $75.39m for the third quarter 2009, compared to net income of $101.8m in the year-ago quarter, on revenue down 16% at $746.34m.
It made an operating loss in the quarter of $91.08m compared to a profit of $105.68m in the same period last year. Diluted net loss per share was $0.23 compared to $0.29 a year ago.
The company said product revenue fell 13% to $528.19m, software entitlements and maintenance revenue rose 25% to $156.54m, and services revenue increased 26% to $189.59m.
For the nine-month period, net income was only $11.46m compared to $219.9m a year ago, on revenue up 7% at $2.52 billion.
Dan Warmenhoven, chairman and chief executive at NetApp, said: Business levels softened in January as many customers’ budgets contracted, resulting in lower revenues than we had expected. At the same time, our storage efficiency value proposition resonates in challenging economic times, and we gained a record number of new customers during the quarter. We decreased non-GAAP operating expenses by $30m in one quarter. However, further reductions were required to optimize resources for our strategic growth initiatives.
The company said it plans to cut approximately 6% of its global workforce, and expects to incur approximately $30m to $35m in severance and other charges in the fourth quarter when it expects non-GAAP gross margins to be approximately 60%.