We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
NETGEAR (NTGR) Q4 Earnings Beat Estimates, Revenues Fall Y/Y
Read MoreHide Full Article
NETGEAR, Inc (NTGR - Free Report) reported fourth-quarter 2023 non-GAAP earnings per share (EPS) of 9 cents against the non-GAAP loss per share of 3 cents recorded in the year-ago quarter. The reported figure surpassed the Zacks Consensus Estimate of earnings of 4 cents per share.
NETGEAR generated net revenues of $188.7 million, down 24.3% year over year. The downtick resulted from softness across CHP and SMB business owing to channel inventory compression. Also, high interest rates and stagnant or negative GTV growth in major markets such as Greater China, Germany and Japan were headwinds. However, the top line beat the consensus estimate by 2%.
Region-wise, net revenues from the Americas were $124.8 million (66% of total revenues), down 11.5% year over year. Europe, the Middle East and Africa generated revenues (20%) of $37.9 million, up 6.2% year over year. Revenues from the Asia Pacific region (14%) increased 22.9% to $25.9 million.
NETGEAR ended the quarter with 877,000 paid service subscribers.
Segmental Performance
Connected Home (including Orbi, Nighthawk, Nighthawk Pro Gaming, Armor, and Meural Brands) delivered revenues of $118.3 million, down 20.1% year over year. The downtick was due to the underperformance of the overall U.S. retail market overall. Our estimate for the segment’s revenues was pegged at $126.9 million. Continued momentum in premium CHP products, like Orbi 8 and 9, tri and quad-band WiFi mesh products and 5G Nighthawk Mobile Hotspots, acted as a tailwind.
NETGEAR holds about 35% share in the U.S. retail Wi-Fi market, including mesh, routers, gateways and extenders.
Despite a strong demand for ProAV-managed switched products, revenues from SMB declined 29.8% year over year to $70.2 million. The downtick was caused by continued channel inventory reductions by channel partners. Our estimate for segmental revenues was $57.7 million.
Other Details
Adjusted gross margin increased to 35% from 24.9% year over year. Non-GAAP operating income was $2.68 million against an operating loss of $3.91 million in the year-ago quarter.
Cash Flow & Liquidity
For the year ended Dec 31, 2023, NETGEAR generated $56.8 million in cash from operations. It also had $176.7 million in cash and cash equivalents and $264.3 million of total current liabilities compared with $228.1 million and $259.8 million, respectively, in the quarter that ended on Oct 1, 2023.
NTGR did not repurchase any shares in the quarter under review.
Q1 Outlook
For the first quarter of 2024, NETGEAR anticipates net revenues in the range of $155-$170 million. The company expects the retail portion of CHP business to experience a seasonal decline coming off the holiday period.
GAAP operating margin is estimated to be between (11.4)% and (8.4)%. Non-GAAP operating margin is expected to be in the band of (8.5)-(5.5)%.
The Zacks Consensus Estimate for Itron’s 2023 EPS has remained unchanged in the past 60 days to $2.88. ITRI’s long-term earnings growth rate is 23%.
Itron’s earnings surpassed the Zacks Consensus Estimate in each of the last four quarters, the average surprise being 289.3%. Shares of ITRI have gained 33.1% in the past year.
The Zacks Consensus Estimate for Woodward’s 2024 EPS has inched up 5.7% in the past 60 days to $5.20. WWD’s long-term earnings growth rate is 15.5%.
Woodward’s earnings beat the Zacks Consensus in each of the last four quarters, the average surprise being 27.2%. Shares of WWD have gained 31% in the past year.
The Zacks Consensus Estimate for Watts Water Technologies 2023 EPS has improved 0.1% in the past 60 days to $8.09. WTS’s long-term earnings growth rate is 7.8%.
WTS’ earnings surpassed the Zacks Consensus Estimate in each of the last four quarters, the average surprise being 11.8%. Shares of WTS have soared 23.2% in the past year.
Unique Zacks Analysis of Your Chosen Ticker
Pick one free report - opportunity may be withdrawn at any time
Image: Bigstock
NETGEAR (NTGR) Q4 Earnings Beat Estimates, Revenues Fall Y/Y
NETGEAR, Inc (NTGR - Free Report) reported fourth-quarter 2023 non-GAAP earnings per share (EPS) of 9 cents against the non-GAAP loss per share of 3 cents recorded in the year-ago quarter. The reported figure surpassed the Zacks Consensus Estimate of earnings of 4 cents per share.
NETGEAR generated net revenues of $188.7 million, down 24.3% year over year. The downtick resulted from softness across CHP and SMB business owing to channel inventory compression. Also, high interest rates and stagnant or negative GTV growth in major markets such as Greater China, Germany and Japan were headwinds. However, the top line beat the consensus estimate by 2%.
Region-wise, net revenues from the Americas were $124.8 million (66% of total revenues), down 11.5% year over year. Europe, the Middle East and Africa generated revenues (20%) of $37.9 million, up 6.2% year over year. Revenues from the Asia Pacific region (14%) increased 22.9% to $25.9 million.
NETGEAR, Inc. Price, Consensus and EPS Surprise
NETGEAR, Inc. price-consensus-eps-surprise-chart | NETGEAR, Inc. Quote
NETGEAR ended the quarter with 877,000 paid service subscribers.
Segmental Performance
Connected Home (including Orbi, Nighthawk, Nighthawk Pro Gaming, Armor, and Meural Brands) delivered revenues of $118.3 million, down 20.1% year over year. The downtick was due to the underperformance of the overall U.S. retail market overall. Our estimate for the segment’s revenues was pegged at $126.9 million. Continued momentum in premium CHP products, like Orbi 8 and 9, tri and quad-band WiFi mesh products and 5G Nighthawk Mobile Hotspots, acted as a tailwind.
NETGEAR holds about 35% share in the U.S. retail Wi-Fi market, including mesh, routers, gateways and extenders.
Despite a strong demand for ProAV-managed switched products, revenues from SMB declined 29.8% year over year to $70.2 million. The downtick was caused by continued channel inventory reductions by channel partners. Our estimate for segmental revenues was $57.7 million.
Other Details
Adjusted gross margin increased to 35% from 24.9% year over year. Non-GAAP operating income was $2.68 million against an operating loss of $3.91 million in the year-ago quarter.
Cash Flow & Liquidity
For the year ended Dec 31, 2023, NETGEAR generated $56.8 million in cash from operations. It also had $176.7 million in cash and cash equivalents and $264.3 million of total current liabilities compared with $228.1 million and $259.8 million, respectively, in the quarter that ended on Oct 1, 2023.
NTGR did not repurchase any shares in the quarter under review.
Q1 Outlook
For the first quarter of 2024, NETGEAR anticipates net revenues in the range of $155-$170 million. The company expects the retail portion of CHP business to experience a seasonal decline coming off the holiday period.
GAAP operating margin is estimated to be between (11.4)% and (8.4)%. Non-GAAP operating margin is expected to be in the band of (8.5)-(5.5)%.
Zacks Rank & Stocks to Consider
NETGEAR currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks worth considering in the broader technology space are Itron (ITRI - Free Report) , Woodward (WWD - Free Report) and Watts Water Technologies (WTS - Free Report) . Woodward and Itron sport a Zacks Rank #1 (Strong Buy), while Watts Water Technologies carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Itron’s 2023 EPS has remained unchanged in the past 60 days to $2.88. ITRI’s long-term earnings growth rate is 23%.
Itron’s earnings surpassed the Zacks Consensus Estimate in each of the last four quarters, the average surprise being 289.3%. Shares of ITRI have gained 33.1% in the past year.
The Zacks Consensus Estimate for Woodward’s 2024 EPS has inched up 5.7% in the past 60 days to $5.20. WWD’s long-term earnings growth rate is 15.5%.
Woodward’s earnings beat the Zacks Consensus in each of the last four quarters, the average surprise being 27.2%. Shares of WWD have gained 31% in the past year.
The Zacks Consensus Estimate for Watts Water Technologies 2023 EPS has improved 0.1% in the past 60 days to $8.09. WTS’s long-term earnings growth rate is 7.8%.
WTS’ earnings surpassed the Zacks Consensus Estimate in each of the last four quarters, the average surprise being 11.8%. Shares of WTS have soared 23.2% in the past year.