NETGEAR NTGRis slated to report first-quarter 2018 results on Apr 25. The company beat the Zack Consensus Estimate in each of the trailing four quarters, delivering an average positive surprise of 10.18%.
Last quarter, the company reported earnings of 59 cents per share, which beat the Zacks Consensus Estimate of 54 cents but declined 22.
For first-quarter 2018, NETGEAR projects revenues between $330 million and $345 million. Non-GAAP operating margin is expected in the range of 6.5-7.5%.
Let’s see how things are shaping up prior to this announcement.
Factors to Consider
NETGEAR’s strong product portfolio is a key growth driver. The company’s Arlo home security products and Orbi WiFI systems continue to boost its top line.
In the fourth quarter, the company rolled out new services across all three business segments, which are expected to drive results this quarter.
NETGEAR expanded its Nighthawk offerings by introducing Nighthawk Pro Gaming Router and Nighthawk Pro Gaming Switch in order to cater to the high-end gaming market. This is expected to boost its Connected Home segment. Moreover, the company partnered with Circle Media to bring Circle with Disney parental controls across the Nighthawk and Orbi WiFi routers and systems.
It remains to be seen whether the company’s newly launched subscription offerings, Insight Basic for $4.99 per month and Insight Premium for $9.99 per month, can benefit its SMB segment.
NETGEAR’s strengthening foothold in the North American market and improving penetration in the EMEA region is a positive.
However, the service provider business continues to pose challenges with the company streamlining the segment.
Also, expenses are on the rise due to the increase in headcount owing to the proposed separation of NETGEAR and its Arlo business, which remain an overhang on the bottom line.
Further, declining revenues in the APAC region is also a concern.