What: Shares of Netgear (NASDAQ:NTGR) were up 28% as of 12:30 p.m. Friday after the networking hardware company announced better-than-expected third-quarter results.

So what: Quarterly revenue fell 3.2% year over year to $341.9 million, and translated to a 24.5% decline in GAAP net income to $15.1 million, or $0.47 per share. On an adjusted basis, which offers business context by excluding things like stock-based compensation and restructuring charges, net income fell 17.2% to $21.7 million, and there was a 6.9% decline in adjusted earnings per share to $0.67. Per-share results were bolstered by Netgear's share repurchase efforts, including $20.2 million spent to buy back 642,000 shares of common stock in the third quarter. 

Those numbers might not seem impressive, but keep in mind analysts, on average, were expecting Netgear to report an even more severe 8.8% drop in revenue to $322.1 million, and a 41.2% decline in adjusted net income to $0.51 per share.

Netgear CEO Patrick Lo credited Netgear's strength to a combination of strength in North America, a "robust back-to-school season,"and higher-than-expected demand from Netgear's service provider customers. Netgear's Retail Business, in particular, had its best-ever quarter in terms of sales, driven by demand for both its Arlo smart-home security cameras, and its high-margin Nighthawk networking product line.

Now what: Keeping in mind Netgear's Q3 results also easily outpaced its own guidance, Netgear now anticipates fourth-quarter revenue of $335 million to $350 million, and adjusted operating margin of 9.5% to 10.5% (compared to 10.3% in Q3). By comparison, consensus estimates predicted Q4 revenue near the lower end of that range at $338.3 million, and adjusted earnings of $0.61 per share.

Relatedly, Lo noted "We are especially looking forward to our Retail Business Unit's performance this holiday season" -- an unsurprising hint at things to come given the RBU's impressive showing during the back-to-school season. Lo also confirmed shipments to service providers in Q4 should return to a normalized $100 million annual run rate, effectively fulfilling a promise management made when the service provider segment's cost-focused restructuring was announced this past February.

If you're wondering whether today's pop was overdone, keep in mind Netgear stock still traded down around 8% year to date as of yesterday's close -- and that was despite showing signs of life as the  restructuring neared completion last quarter. Given Netgear's solid top- and bottom-line beat, strong guidance, and encouraging progress in its core segments, I think Netgear stock has plenty more room to run from here.

Steve Symington owns shares of Netgear. The Motley Fool recommends 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.