Netgear Earnings: Here’s Why Shares are Down Now

Netgear Inc. (NASDAQ:NTGR) delivered a profit and beat Wall Street’s expectations, AND beat the revenue expectation. The revenue beat is a positive sign to shareholders seeking high growth out of the company. Shares are down 6.5%.

Netgear Inc. Earnings Cheat Sheet

Results: Adjusted Earnings Per Share decreased 15.38% to $0.55 in the quarter versus EPS of $0.69 in the year-earlier quarter.

Revenue: Rose 0.41% to $310.44 million from the year-earlier quarter.

Actual vs. Wall St. Expectations: Netgear Inc. reported adjusted EPS income of $0.55 per share. By that measure, the company beat the mean analyst estimate of $0.54. It beat the average revenue estimate of $307.7 million.

Quoting Management: Patrick Lo, Chairman and Chief Executive Officer of NETGEAR commented, “The worldwide macroeconomic environment proved challenging for us during the second half of 2012. In the fourth quarter, we witnessed reduced spending among our service provider customers and Commercial Business Unit customers. Despite this, our Retail Business Unit experienced the best fourth quarter sequential growth in the last three years. We are very pleased with the share gain against our retail competitors worldwide. We introduced 32 new products in the fourth quarter of 2012 and once again, we were a double honoree this year in the CES Innovations Design and Engineering Awards competition.”

Key Stats (on next page)…

Revenue decreased 1.51% from $315.21 million in the previous quarter. EPS decreased 15.38% from $0.65 in the previous quarter.

Looking Forward: Analysts have a more negative outlook for the company’s next-quarter performance. Over the past three months, the average estimate for next quarter’s earnings has fallen from a profit of $0.64 to a profit $0.62. For the current year, the average estimate has moved down from a profit of $2.63 to a profit of $2.55 over the last ninety days.

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(Company fundamentals provided by Xignite Financials. Email any earnings discrepancies to earnings [at] wallstcheatsheet.com)