Netgear Meets on Revenues, Misses on EPS

Netgear (Nasdaq: NTGR  ) reported earnings on July 26. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended July 1 (Q2), Netgear met expectations on revenues and missed estimates on earnings per share.

Compared to the prior-year quarter, revenue increased and GAAP earnings per share improved.

Margins shrank across the board.

Revenue details
Netgear booked revenue of $320.7 million. The eight analysts polled by S&P Capital IQ predicted a top line of $324.3 million on the same basis. GAAP reported sales were 10% higher than the prior-year quarter's $291.2 million.

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

EPS details
EPS came in at $0.64. The seven earnings estimates compiled by S&P Capital IQ forecast $0.68 per share. GAAP EPS of $0.56 for Q2 were 3.7% higher than the prior-year quarter's $0.54 per share.

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 29.5%, 170 basis points worse than the prior-year quarter. Operating margin was 9.7%, 60 basis points worse than the prior-year quarter. Net margin was 6.7%, 40 basis points worse than the prior-year quarter.

Looking ahead
Next quarter's average estimate for revenue is $344.5 million. On the bottom line, the average EPS estimate is $0.73.

Next year's average estimate for revenue is $1.36 billion. The average EPS estimate is $2.86.

Investor sentiment
The stock has a five-star rating (out of five) at Motley Fool CAPS, with 2,284 members out of 2,356 rating the stock outperform, and 72 members rating it underperform. Among 634 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 625 give Netgear a green thumbs-up, and nine give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Netgear is outperform, with an average price target of $42.63.

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