Netgear Inc. (NASDAQ:NTGR) delivered a profit and missed Wall Street’s expectations, AND came up short on beating the revenue expectation. The revenue miss is a negative sign to shareholders seeking high growth out of the company. Shares are up 2.22%.
Netgear Inc. Earnings Cheat Sheet
Results: Adjusted Earnings Per Share decreased 31.51% to $0.5 in the quarter versus EPS of $0.73 in the year-earlier quarter.
Revenue: Decreased 9.89% to $293.4 million from the year-earlier quarter.
Actual vs. Wall St. Expectations: Netgear Inc. reported adjusted EPS income of $0.5 per share. By that measure, the company missed the mean analyst estimate of $0.56. It missed the average revenue estimate of $297.78 million.
Quoting Management: Patrick Lo, Chairman and Chief Executive Officer of NETGEAR commented, “The lower than expected operating margin in the first quarter was driven by product mix, primarily due to difficulties in the transition to our new ReadyNAS line of products. The transition occurred late in the quarter and difficulty securing components and some last minute bug fixes led to unanticipated delays. This marked the first time we completely replaced an entire line of products, which involved obsoleting ten models and replacing them with seven brand new models. The execution was much harder than anticipated and we learned a valuable lesson in engineering and manufacturing planning. The good news is that our supply is now in full swing and customer feedback on the new product line has been very positive.”
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