Netgear Beats on Both Top and Bottom Lines

Before you go, we thought you'd like these...
Before you go close icon

Netgear (NAS: NTGR) reported earnings yesterday. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended April 1 (Q1), Netgear beat expectations on revenues and beat expectations on earnings per share.

Compared to the prior-year quarter, revenue grew significantly and GAAP earnings per share grew.


Gross margins contracted, operating margins increased, and net margins expanded.

Revenue details
Netgear notched revenue of $325.6 million. The seven analysts polled by S&P Capital IQ expected sales of $318.8 million on the same basis. GAAP reported sales were 17% higher than the prior-year quarter's $278.8 million.

anImage

Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.

EPS details
Non-GAAP EPS came in at $0.73. The seven earnings estimates compiled by S&P Capital IQ anticipated $0.68 per share on the same basis. GAAP EPS of $0.65 for Q1 were 14% higher than the prior-year quarter's $0.57 per share.

anImage

Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.

Margin details
For the quarter, gross margin was 30.7%, 80 basis points worse than the prior-year quarter. Operating margin was 11.2%, 30 basis points better than the prior-year quarter. Net margin was 7.7%, 10 basis points better than the prior-year quarter.

Looking ahead
Next quarter's average estimate for revenue is $318.5 million. On the bottom line, the average EPS estimate is $0.66.

Next year's average estimate for revenue is $1.35 billion. The average EPS estimate is $2.79.

Investor sentiment
The stock has a five-star rating (out of five) at Motley Fool CAPS, with 2,265 members rating the stock outperform and 72 members rating it underperform. Among 700 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 690 give Netgear a green thumbs-up, and 10 give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Netgear is hold, with an average price target of $43.63.

The game is changing for makers of communications equipment, and some of the old guard may not make it. Where will Netgear fit in? Who's going to lead going forward? Check out "3 Hidden Winners of the iPhone, iPad, and Android Revolution." Click here for instant access to this free report.

At the time this article was published Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor ofMotley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. Motley Fool newsletter services have recommended buying shares of Netgear. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Copyright © 1995 - 2012 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

Read Full Story

Want more news like this?

Sign up for Finance Report by AOL and get everything from business news to personal finance tips delivered directly to your inbox daily!

Subscribe to our other newsletters

Emails may offer personalized content or ads. Learn more. You may unsubscribe any time.

From Our Partners