Pure Storage holdings rise on first quarter beat and raise report

Enterprise data storage company Pure storage (PSTG) late Wednesday beat Wall Street's targets for the fiscal first quarter and ahead of forecasts for the current period. Pure Storage stock soared in extended trading.




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The Mountain View, Calif.-based company earned an adjusted 8 cents a share on revenue of $589.3 million for the quarter ended May 7. Analysts polled by FactSet had expected earnings of 4 cents a share on sales of $560 million. Year over year, however, Pure Storage's earnings declined 68% while revenue fell 5%.

The report ended the company's streak with seven quarters of earnings growth and nine quarters of revenue growth.

On the bright side, the company's annual recurring subscription revenue rose 29% year over year to $1.2 billion in the first quarter.

For the current quarter, Pure Storage forecast revenue of $680 million, up 5% from the same period last year. Wall Street had expected revenue of $658 million for the fiscal second quarter.

Pure inventory in the consolidation pattern

In after-hours trading on the stock market today, Pure Storage shares are up 7% to 30.80. During Wednesday's regular session, Pure Storage shares fell 2.1% to close at 28.79.

According to IBD MarketSmith charts, Pure Storage stock has consolidated over the past 29 weeks with a buy point of 32.55.

“We are the clear leader in data storage and are now delivering a portfolio that can meet the majority of any enterprise's storage needs,” said Chief Executive Charles Giancarlo in a press release.

He added, “The superior economics, performance, operational and environmental efficiencies of the Pure product portfolio over competing hard drive and solid state drive (SSD) based all-flash offerings are now undeniable.”

HPE and NetApp also report their quarterly results

Other enterprise technology hardware stocks move on Wednesday's earnings news Hewlett Packard Enterprise (HPE) and NetApp (NTAP).

HPE shares fell 7.1% to 14.42 on Wednesday after the company released mixed results and guidance for the second fiscal quarter late Tuesday. Earnings rose 18% year over year to 52 cents a share for the quarter ended April 30, beating expectations at 49 cents. However, revenue rose just 4% to $6.97 billion, falling short of the $7.3 billion target.

Weakness in sales in HPE servers and storage offset strength in artificial intelligence and high-performance computing equipment.

NetApp shares rose 5.5% to 70 late Wednesday after the storage device maker beat expectations for its fourth fiscal quarter. The company also forecast a higher forecast for the coming full year, even if the outlook for the first quarter of the fiscal year was bleak.

NetApp earned an adjusted $1.54 per share, up 8% year over year, on revenue of $1.58 billion, down 6%.

Pure Storage stocks rank first in the industry group

According to the IBD Stock Checkup, Pure Storage stock is ranked #1 of 10 stocks in the IBD Computer Data Storage industry group. PSTG stock has an IBD Composite Rating of 96 out of 99.

NetApp stock ranks third in the group with a composite rating of 81.

Hewlett Packard Enterprise is #12 of 58 stocks in the IBD Computer-Tech Services industry group. According to the IBD Stock Checkup, HPE stock has a composite rating of 78.

Follow Patrick Seitz on Twitter at @IBD_PSeitz For more stories on consumer technology, software, and semiconductor stocks, click here.

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