Why Netgear Shares Plunged
Jul 27th 2012 3:51PM
Updated Jul 27th 2012 4:30PM
Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
What: Shares of Netgear (NAS: NTGR) plunged by as much as 18% today before recouping most of those losses after the company reported earnings.
So what: The maker of gear for the Internet put up second-quarter sales of $320.7 million, a little shy of investors' expectations of $323.6 million. The same story panned out down below, posting adjusted earnings per share of $0.64 compared to the consensus of $0.69.
Now what: Guidance was also gloomy, with third-quarter revenue expected to be $310 million to $325 million, the high end of which still falls short of the analyst estimate of $344.2 million. CEO Patrick Lo cited the macroeconomic situation in Europe but said the business is seeing strong growth in Asia-Pacific. Netgear also recently closed two smaller acquisitions, an engineering company in India and privately held AVAAK.
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