Uncertainty continues to surround data storage company NetApp Inc., which reported mixed results in its second-quarter earnings call and issued revenue guidance for the next quarter that came up short of expectations.

NetApp, which sells a mix of data storage hardware and software for hybrid cloud information technology environments, reported a profit before certain costs such as stock compensation of $1.09 per share. That was well above Wall Street’s forecast of earnings of 94 cents per share. However, NetApp’s revenue of $1.37 billion in the quarter fell just short of Wall Street’s $1.38 billion target.

In an interview with SiliconANGLE, NetApp Chief Financial Officer Ron Pasek blamed the revenue miss on a key enterprise deal that was expected to close in the quarter but didn’t, saying this would close in the third quarter instead.

Even so, the company will likely miss revenue projections again in the next period. For the third quarter, the company is projecting revenue of $1.39 billion to $1.54 billion, the midpoint of which is just below the $1.47 billion analyst consensus. The full-year forecast isn’t much better, with NetApp projecting an overall revenue decline of 8% year-over-year.

NetApp’s shares were flat in after-hours trading.

Pasek cited ongoing uncertainty in Europe, China and Japan for what he described as a slowdown in spending by large companies. But he said the company was still doing well in Europe despite the macroeconomic challenges.

Still, there’s reason to be optimistic about NetApp’s fortunes in the long-term, Pasek said. He drew attention to the company’s all-flash array products, whose revenue was up 31% from the previous quarter and is now on a $72 million annual run rate. He said he expects all-flash revenue to grow to $400 million to $600 million in the next 18 months, maintaining a forecast made some time ago.

“We now have deep relationships among all the hyperscalers,” Pasek said. “The ability to use those flash arrays on-premises or in the cloud or in both is definitely a differentiator for us with customers.”

Moor Insights & Strategy analyst Steve McDowell told SiliconANGLE that NetApp’s results didn’t really surprise anyone, given that the company had warned earlier this year it was expecting to face a tough couple of quarters.

“The topline revenue number tells me that they continue to struggle to expand their customer base in traditional storage,” McDowell said. “The bright spot is the significant growth in cloud data services and private cloud. This is exactly where they’ve pinned their strategy, and it’s good to see solid execution and market reception. A strategic shift like this will take many quarters to fundamentally impact NetApp’s earnings, but it’s a strong positive for me.”

Separately, NetApp named James Whitemore as its new chief marketing officer. He had been serving as interim CMO since July.

With reporting from Robert Hof

Photo: NetApp