NetApp cuts first quarter outlook sharply, cites economic concerns

NetApp cut its outlook for the first quarter citing "increasing uncertainty in the broader macro environment."

The NetApp outlook comes as Dell and Cisco have warned that there's a pause in IT spending.

According to the storage player, first quarter revenue will be $1.40 billion to $1.50 billion, a decline of 12 percent to 18 percent from the fourth quarter. Non-GAAP earnings will be 34 cents a share to 39 cents a share.

Wall Street was expecting NetApp to report first quarter earnings of 59 cents a share on revenue of $1.6 billion. Given the large miss, it's not surprising that NetApp shares were hammered in afterhours trading, falling 20 percent.

The dismal outlook came as NetApp delivered a solid fourth quarter. The company reported fourth quarter earnings of $181 million, or 47 cents a share, on revenue of $1.7 billion, up 19 percent from a year ago. Fourth quarter non-GAAP earnings were 66 cents a share.

Wall Street was expecting fourth quarter earnings of 63 cents a share on revenue of $1.68 billion.

Although NetApp cited economic conditions, the company is also facing stiff competition from EMC.