Boston, MA 05/22/2014 (wallstreetpr) – NetApp Inc. (NASDAQ:NTAP) on May 21, 2014, after reeling under the pressure from Eliot Management, an activist shareholder, said that it was ready to spend around $1 billion till September 2014 in order to buy its shares back.
Eliott Management Acquired 4.3% shares of NetApp
Eliott Management confirmed that it was the owner of around 16 million NetApp shares, which accounted for 4.3% of the total shares of the company. With this, Eliott also became the largest shareholder of NetApp.
Statement from the Portfolio Manager, Elliott Management
The Portfolio Manager, Elliott Management, Jesse Cohn said that NetApp’s step to improvise its cost structure and capital is commendable.
Statement from the CEO of NetApp, Tom Georgens
Tom Georgens, the CEO of NetApp Inc. (NASDAQ:NTAP) said that decision of speeding up the process of buying back shares as well as expansion of the company was not compelled due to any shareholder. The plan was in the making a long time back, and that none of the shareholders had an impact on this decision.
NetApp’s stock repurchase program
The stock repurchase program of the company involved $1.6 to $3 billion. The deadline of the program is decided as next three years, i.e., by 2017. The quarterly cash dividend of the company was set at 15 cents per share. The company said that it intended to increase this amount over the time. As part of its program, NetApp has also slashed 900 jobs. The pre-tax restructuring charge of the company is expected to be somewhere around $50-$60 million in the present quarter.
First Quarter results
NetApp Inc. (NASDAQ:NTAP)’S first quarter results were not very satisfactory with the EPS being 45-50 cents and revenue being somewhere between $1.48 billion and $1.58 billion. On average, the analysts expected the EPS to be 53 cents and the revenue to be approximately $1.60 billion.
