NetGear Shares Skyrocketed: What You Need to Know

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of NetGear (Nasdaq: NTGR  ) soared as much as 28% in intraday trading after punking Wall Street analysts with first-quarter results that blew away their estimates.

So what: Revenue rose 32% to $278.8 million while adjusted profit improved 35% to $0.65 a share. Analysts had been expecting $256.5 million and $0.52 a share, respectively.

Now what: Management credited improving macroeconomic conditions in both North America and India for the beat. All told, the company shipped 5.6 million units. That's a 19% increase over last year's Q1, when NetGear shipped 4.7 million units.

Momentum should carry into Q2. Executives expect $270 million to $280 million in second-quarter revenue, well above the $240.9 million analysts had been expecting. Growth investors looking to capitalize on the rise of networked homes may wish to give NetGear a look.

Interested in more info on NetGear? Add it to your watchlist.

Fool contributor Tim Beyers is a member of the Motley Fool Rule Breakers stock-picking team. NetGear is a Motley Fool Stock Advisor selection. You can try any of our Foolish newsletter services free for 30 days.

Tim didn't own shares in any of the companies mentioned in this article at the time of publication. Check out his portfolio holdings and Foolish writings, or connect with him on Twitter as @milehighfool. You can also get his insights delivered directly to your RSS reader. 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 is also on Twitter as @TheMotleyFool. Its disclosure policy is at least 10% better than other disclosure policies.


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  • Report this Comment On April 30, 2011, at 10:58 AM, FoolSolo wrote:

    Couple of key highlights from the report:

    "Our impressive first quarter growth was driven by new products introduced in recent quarters. Particularly encouraging is the market's reception to our products in TV and mobile connectivity, Docsis 3.0 cable gateways, and business network storage. To continue the new product momentum, we introduced another 20 new products in Q1 2011, beefing up our portfolios in the areas of TV connectivity, Docsis 3.0 cable gateways, and security appliances."

    CEO, Patric Lo, further said "In the second quarter of 2011, we intend to roll out 17 new products."

    Another important reveal is in revenue by geography. In Americas, Q/Q revs went from $107M to $132M, EMEA went from $81M to $123M, and APAC went from $23M to $24M. I wonder how much of this is affected by the weakening $US dollar, and strengthened $euro?

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