NETGEAR Q3 revenue falls on supply constraints; adjusted EPS rises slightly
Overview
US networking equipment provider's Q3 revenue fell 9.3% yr/yr amid supply constraints
Non-GAAP EPS for Q3 rose slightly from prior year
Company repurchased $15 mln in shares during Q3
Outlook
NETGEAR expects Q4 net revenue of $160 mln to $175 mln
Company sees Q4 GAAP operating margin of (8.7)% to (5.7)% and non-GAAP margin of 0%-3%
Result Drivers
SUPPLY CONSTRAINTS - Co said manufacturing challenges at a key production partner limited ability to meet customer demand and constrained revenue
ENTERPRISE DEMAND - Co said strong end customer demand in Enterprise segment, especially for ProAV managed switches, supported results
CONSUMER SEGMENT STRATEGY - Co said intentional focus on optimizing Consumer segment for gross profit and managing Service Provider products for value further limited topline revenue
Company press release:
Key Details
Metric | Beat/Miss | Actual | Consensus Estimate |
Q3 Revenue | Miss | $167.35 mln | $170.05 mln (2 Analysts) |
Q3 Net Loss | $12.27 mln | ||
Q3 Gross Margin | 40.10% | ||
Q3 Gross Profit | $67.09 mln | ||
Q3 Operating Income | -$13.70 mln | ||
Q3 Operating Margin | -8.20% | ||
Q3 Pretax Loss | $12.66 mln |
Analyst Coverage
The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 3 "strong buy" or "buy", no "hold" and no "sell" or "strong sell"
The average consensus recommendation for the communications & networking peer group is "buy"
Wall Street's median 12-month price target for NETGEAR, Inc. is $34.00, about 55.8% above its November 3 closing price of $21.82
The stock recently traded at 50 times the next 12-month earnings vs. a P/E of 55 three months ago
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(This story was created using Reuters automation and AI based on LSEG and company data. It was checked and edited by a Reuters journalist prior to publication.)