Data storage company NetApp Inc. took a beating in after-hours trading despite posting fiscal first-quarter earnings today that came in above expectations.

The company, which said it benefited from strong demand for its all-flash storage arrays, reported a profit of $283 million, or $1.05 per share, on revenue of $1.47 billion. Earnings before certain costs such as stock compensation came in a penny less at $1.04 a share.

Wall Street was expecting earnings before certain costs of just 80 cents per share on $1.42 billion in revenue.

But NetApp painted a bleaker picture of its financial fortunes going forward, posting second-quarter guidance that only just met Wall Street’s forecasts. The company said it’s expecting revenue in the current quarter to fall somewhere between $1.45 billion and $1.55 billion, with earnings of 94 cents to $1 per share. Wall Street was hoping for revenue of $1.5 billion and earnings of 97 cents per share.

That marked the third successive quarter in which NetApp has posted uncertain guidance, and just as in the previous two, investors reacted negatively. NetApp’s stock fell nearly 6.5 percent in after-hours trading.

Nonetheless NetApp Chief Executive George Kurian put a brave face on its quarterly performance: “We delivered a very strong first quarter with revenue, gross margin, operating margin, and earnings per share all above our guidance,” he said.

Part of the reason for NetApp’s blip is that it continues to undergo a major transition of its product line to meet the industry’s growing demand for newer flash and software-defined network and storage technologies. The company had some positive news there, noting its all-flash array product line hit a revenue rate of $2.2 billion, with sales up 50 percent from the year before.

NetApp has also been busy fostering its relationships with companies including Cisco Systems Inc., which it partners with on its FlexPod cloud infrastructure. Arun Garg, director of product management for the Converged Infrastructure Group at NetApp Inc., appeared on theCUBE, SiliconANGLE’s mobile livestreaming studio during Cisco Live event in Orlando in June. There, he discussed how the company was working with Cisco to build new vertical tools based on the FlexPod platform.

NetApp also introduced its Ontap AI software in the last quarter, a specialized server powered by Nvidia Corp. hardware that’s designed for running artificial intelligence workloads.

These relationships are a big plus for NetApp even if its failing to impress investors over the short-term, said Holger Mueller, principal analyst and vice president of Constellation Research Inc. The analyst said the company was “doing well” under the leadership of Kurian, who has managed to do something that few other companies have figured out, namely partnering with both the “old guard”, which includes the likes of Cisco, as well as the “new guard”, which includes companies such as Google LLC and Microsoft Corp.

“This helps NetApp to remain top of mind for CxOs who need to purchase a modern storage solution to power their next generation apps,” Mueller said.

Image: NetApp