NETGEAR (NASDAQ:NTGR) Announces Earnings Results, Beats Estimates By $0.15 EPS

NETGEAR (NASDAQ:NTGR) released its earnings results on Thursday. The communications equipment provider reported $0.16 EPS for the quarter, beating analysts’ consensus estimates of $0.01 by $0.15, FiscalAI reports. NETGEAR had a negative return on equity of 2.71% and a negative net margin of 3.58%.The company had revenue of $168.56 million during the quarter, compared to the consensus estimate of $157.80 million. During the same quarter last year, the company earned $0.06 earnings per share. NETGEAR’s quarterly revenue was down 1.2% compared to the same quarter last year.

Here are the key takeaways from NETGEAR’s conference call:

• Enterprise revenue grew 7.7% year over year to $89 million, led by Pro AV managed switches and strength in the Americas and EMEA. Enterprise now represents about 53% of total revenue and delivered a record 54.1% gross margin.
• Consolidated Q2 results exceeded the high end of guidance, with revenue of $168.6 million, non-GAAP operating margin of 2.4%, and non-GAAP EPS of $0.16. Gross margin expanded 360 basis points year over year to 41.4%, supported by the higher-margin enterprise mix and acquired switch operating-system technology.
• NETGEAR reported continued progress in its software and services transformation, including the Align platform and an enhanced Insight offering. Annual recurring revenue increased 15% year over year to $41.6 million, with 558,000 recurring subscribers exiting the quarter.
• Consumer revenue fell 9.4% year over year to $79.6 million, while gross margin declined to 27.3% amid memory-cost inflation, aggressive promotions, and supply constraints. Management expects these pressures to weigh more heavily in Q3 and projects total revenue of $165 million-$175 million and non-GAAP operating margin between -3% and 0%.
• APAC enterprise revenue declined 16% year over year as NETGEAR restructures its go-to-market model and reduces distribution layers. The company expects sequential growth to resume in Q4 under new regional leadership, but near-term execution remains a headwind.

NETGEAR Stock Down 0.3%

NASDAQ:NTGR opened at $24.30 on Friday. The company has a market cap of $652.21 million, a P/E ratio of -27.61 and a beta of 1.20. The firm’s 50 day moving average is $23.76 and its two-hundred day moving average is $23.23. NETGEAR has a fifty-two week low of $19.00 and a fifty-two week high of $36.86.

Wall Street Analyst Weigh In

Separately, Weiss Ratings restated a “sell (d)” rating on shares of NETGEAR in a report on Wednesday, June 24th. Two research analysts have rated the stock with a Buy rating, one has issued a Hold rating and one has issued a Sell rating to the company. According to data from MarketBeat.com, the stock currently has an average rating of “Hold” and a consensus price target of $36.00.

Insider Transactions at NETGEAR

In related news, Director Laura Durr sold 1,000 shares of the stock in a transaction that occurred on Tuesday, June 2nd. The shares were sold at an average price of $26.76, for a total transaction of $26,760.00. Following the completion of the sale, the director owned 42,059 shares of the company’s stock, valued at approximately $1,125,498.84. This represents a 2.32% decrease in their position. The transaction was disclosed in a document filed with the Securities & Exchange Commission, which can be accessed through the SEC website. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, insider Pramod Badjate sold 3,000 shares of the company’s stock in a transaction on Friday, July 31st. The stock was sold at an average price of $23.88, for a total transaction of $71,640.00. Following the sale, the insider directly owned 154,073 shares of the company’s stock, valued at approximately $3,679,263.24. This trade represents a 1.91% decrease in their ownership of the stock. Additional details regarding this sale are available in the official SEC disclosure. The sale was made to cover tax withholding obligations related to the vesting of equity awards. Insiders have sold a total of 12,085 shares of company stock worth $313,933 over the last 90 days. Company insiders own 3.10% of the company’s stock.

Institutional Inflows and Outflows

Institutional investors and hedge funds have recently bought and sold shares of the business. Johnson Financial Group Inc. acquired a new stake in shares of NETGEAR in the 4th quarter valued at about $25,000. Comerica Bank raised its holdings in shares of NETGEAR by 64.8% during the third quarter. Comerica Bank now owns 1,091 shares of the communications equipment provider’s stock valued at $35,000 after buying an additional 429 shares during the last quarter. Kemnay Advisory Services Inc. bought a new stake in shares of NETGEAR during the fourth quarter valued at approximately $89,000. Tower Research Capital LLC TRC boosted its position in shares of NETGEAR by 35.2% during the second quarter. Tower Research Capital LLC TRC now owns 3,475 shares of the communications equipment provider’s stock worth $101,000 after buying an additional 904 shares during the period. Finally, CANADA LIFE ASSURANCE Co grew its holdings in NETGEAR by 242.6% in the 2nd quarter. CANADA LIFE ASSURANCE Co now owns 4,087 shares of the communications equipment provider’s stock worth $119,000 after buying an additional 2,894 shares in the last quarter. Hedge funds and other institutional investors own 82.97% of the company’s stock.

NETGEAR Company Profile

NETGEAR, Inc (NASDAQ: NTGR) is a global provider of networking solutions for consumer, business and service provider markets. The company designs, develops and markets a comprehensive portfolio of products that enable high-speed connectivity, data storage and network security for homes, small to medium-sized businesses and large enterprises.

Its product lineup includes Wi-Fi routers, mesh networking systems, cable modems, mobile broadband gateways and Ethernet switches—offered in both managed and unmanaged configurations.