Network Appliance posted sluggish revenue growth and lower profits for its first fiscal quarter of 2008, as the company faced a slowdown in sales from its largest customers in the US and Europe.

But the company punched up the news by announcing plans to expand its stock repurchasing program and grab as much as $1bn of its shares, funded by working capital. The company said the stock will add to the $200m remaining under existing programs.

NetApp's income for the quarter ended July 27, was $34.3m, down 37.3 per cent from $54.7m a year ago. Revenue reached $689.2, a 11 per cent rise from $621.3m during the same period last year and a 14 per cent decrease compared to $801.2m during its forth fiscal quarter.

"We are clearly disappointed with our revenue growth this quarter, yet confident about our underlying business strength and continued health, said NetApp CEO Dan Warmenhoven. "Our bookings growth and cash flow are both very encouraging, and we are optimistic about getting back on track for higher growth in revenue and profits going forward."

Despite the revenue results, the numbers beat the company's revised forecast of landing between $684m and $688m. This pleased investors enough to send shares up nearly 5 per cent in after-hours trading.

Warmenhoven said in a conference call he expects sales from the company's large enterprise customers to pick up for the remainder of the year.

NetApp expects revenue for the second quarter to be between $752m and $768m, marking a year-over-year growth of 15 to 18 per cent. ®