Pure Storage shares erase double-digit gains despite earnings beat

Shares of Pure Storage (PSTG) stumbled in intraday trade after spiking 13 percent premarket on Friday, following better-than-expected second-quarter earnings.

While the flash-based storage company posted adjusted earnings per share at a loss of $0.16, it was less than the estimated loss of $0.23. Revenues of $163 million beat analyst forecasts of $155 million, driven by repeat purchase rates and growing sales to international customers.

Demand from cloud customers also contributed to earnings growth, which "accounts for 25 percent of [Pure Storage's] business," said CEO Scott Dietzen in a statement.

Despite positive results, shares of Pure Storage ended the day more than 3 percent lower.

"Sentiment in storage space is relatively weak. If you look at results at Nimble Storage (NMBL) on Tuesday, that stock also traded up, and subsequently traded down. We're seeing the same dynamic with Pure Storage," said John Lucia, analyst at JMP Securities.

"We were very pleased with the results. It shows Pure Storage can navigate the competitive environment and execute very well," he added.

Pure Storage was one of the most-anticipated IPOs of 2015, and is currently trading below its listed price of $17 per share.

The company did not have a comment on record.