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