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What to Expect When Netgear (NTGR) Reports Q4 Earnings?
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Netgear Inc. (NTGR - Free Report) is set to report fourth-quarter 2016 results on Feb 7. Last quarter, the company posted a positive earnings surprise of 7.94%. The company has posted an average positive earnings surprise of 22.22% over the past four quarters.
Let’s see how things are shaping up for this announcement.
Factors to Consider
Netgear designs technologically advanced, branded networking products that address the specific needs of small businesses and home users. A strong product portfolio, comprising offerings like Arlo smart home security-cameras and Nighthawk routers and gateways, will boost the top line.
We believe that Netgear’s strength in its retail business will primarily drive results. Region wise, North America continues to be strong. In the third quarter, revenues from retail unit grew 18.4% while the same from North America grew 2.5%.
However, the service provider business continues to pose challenges with the company streamlining this segment. In the third quarter, segment revenues plunged as much as 37.1% year over year.
For the fourth quarter, the company expects revenues of $340 million to $355 million. Non- GAAP operating margin is expected to be around 10.5% to 11.5%.
Our proven model does not conclusively show that Netgear is likely to beat earnings this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. This is not the case here as you will see below.
Zacks ESP: Netgear currently has an Earnings ESP of 0.00%. This is because both the Most Accurate estimate and the Zacks Consensus Estimate stand at 66 cents per share. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Netgear has a Zacks Rank #3, which when combined with a 0.00% ESP, makes surprise prediction difficult.
We caution against stocks with a Zacks Rank #4 or 5 (Sell-rated) going into the earnings announcement, especially when the company is seeing negative estimate revisions momentum.
Stocks to Consider
Here are some stocks that, as per our model, have the right combination of elements to post an earnings beat this quarter:
Pandora Media, Inc. with an Earnings ESP of +8.11% and a Zacks Rank #3.
CenturyLink, Inc. with an Earnings ESP of +1.79% and a Zacks Rank #3.
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Today, you are invited to download the full list of 220 Zacks Rank #1 "Strong Buy" stocks – absolutely free of charge. Since 1988, Zacks Rank #1 stocks have nearly tripled the market, with average gains of +26% per year. Plus, you can access the list of portfolio-killing Zacks Rank #5 "Strong Sells" and other private research. See these stocks free >>
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What to Expect When Netgear (NTGR) Reports Q4 Earnings?
Netgear Inc. (NTGR - Free Report) is set to report fourth-quarter 2016 results on Feb 7. Last quarter, the company posted a positive earnings surprise of 7.94%. The company has posted an average positive earnings surprise of 22.22% over the past four quarters.
Let’s see how things are shaping up for this announcement.
Factors to Consider
Netgear designs technologically advanced, branded networking products that address the specific needs of small businesses and home users. A strong product portfolio, comprising offerings like Arlo smart home security-cameras and Nighthawk routers and gateways, will boost the top line.
We believe that Netgear’s strength in its retail business will primarily drive results. Region wise, North America continues to be strong. In the third quarter, revenues from retail unit grew 18.4% while the same from North America grew 2.5%.
However, the service provider business continues to pose challenges with the company streamlining this segment. In the third quarter, segment revenues plunged as much as 37.1% year over year.
For the fourth quarter, the company expects revenues of $340 million to $355 million. Non- GAAP operating margin is expected to be around 10.5% to 11.5%.
NETGEAR, Inc. Price and EPS Surprise
NETGEAR, Inc. Price and EPS Surprise | NETGEAR, Inc. Quote
Earnings Whispers
Our proven model does not conclusively show that Netgear is likely to beat earnings this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. This is not the case here as you will see below.
Zacks ESP: Netgear currently has an Earnings ESP of 0.00%. This is because both the Most Accurate estimate and the Zacks Consensus Estimate stand at 66 cents per share. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Netgear has a Zacks Rank #3, which when combined with a 0.00% ESP, makes surprise prediction difficult.
We caution against stocks with a Zacks Rank #4 or 5 (Sell-rated) going into the earnings announcement, especially when the company is seeing negative estimate revisions momentum.
Stocks to Consider
Here are some stocks that, as per our model, have the right combination of elements to post an earnings beat this quarter:
Twilio Inc. (TWLO - Free Report) with an Earnings ESP of +8.33% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.
Pandora Media, Inc. with an Earnings ESP of +8.11% and a Zacks Rank #3.
CenturyLink, Inc. with an Earnings ESP of +1.79% and a Zacks Rank #3.
The Best Place to Start Your Stock Search
Today, you are invited to download the full list of 220 Zacks Rank #1 "Strong Buy" stocks – absolutely free of charge. Since 1988, Zacks Rank #1 stocks have nearly tripled the market, with average gains of +26% per year. Plus, you can access the list of portfolio-killing Zacks Rank #5 "Strong Sells" and other private research. See these stocks free >>