NetApp shares fell 10 percent Thursday following the storage company’s disappointing fourth-quarter earnings report late Wednesday.
At least four analysts downgraded the company’s stock.
“In what was easily one of the worst conference calls we have heard, [NetApp] missed fourth quarter expectations and offered abysmal first quarter guidance,” Needham & Co. analyst Richard Kugele wrote in a particularly blunt research note.
Kugele, who downgraded the stock from “buy” to “hold,” described NetApp’s performance as “another quarter of the storage ‘yips,’” using a term that is most commonly used to describe golfers who are suddenly unable to putt due to nervousness.
He said the woes in NetApp’s Clustered ONTAP business, which is designed to help customers migrate to the cloud, that began in the third quarter continued into the fourth quarter as new competitors and delays in the product caused NetApp to lose market share.
Other issues were related to sales execution, a factory move and currency headwinds resulting from the strength of the U.S. dollar.
NetApp announced Wednesday that it was eliminating 500 jobs worldwide, or about 4 percent of its workforce of 12,800. The company hasn’t disclosed how many of the jobs being cut are in Research Triangle Park, where NetApp employed more than 1,600 workers a year ago.
Kugele wrote that with NetApp facing continued challenges through the first half of the year, it would need to dramatically ramp up sales in the second half of the year just to reach its revenue total for the previous year.
NetApp shares closed Thursday at $31.77, down $3.56. The stock is down 23 percent this year.