Tuesday,networking solutions provider Netgear, Inc. (NTGR), recorded profit for the fourth quarter compared to a loss last year, boosted by a 36% rise in revenues driven by growth from share gain in the U.S., European market. Revenue for the quarter came in ahead of street expectations. The company also provided revenue guidance for the first quarter of the fiscal 2010.Netgear's shares rose about 15% after the announcement of the results.
San Jose, California-based Netgear reported net income for the fourth quarter of $7.9 million, or $0.22 per share, compared to net loss of $7.3 million or $0.21 per share in the year-ago period.
Results for the quarter includes net of any tax effect, for in-process research and development and technology license arrangements, amortization of purchased intangibles, stock-based compensation, restructuring, acquisition related compensation, and litigation reserves.
Excluding these items, non-GAAP net income for the quarter was $11.8 million or $0.34 per share, compared to net loss of $2.5 million or $0.07 per share in the prior year quarter.
On average,seven analysts polled by Thomson Reuters expected the company to earn $0.22 per share for the quarter. Analysts estimates' typically exclude one-time items.
Net revenue edged up 36% year-over-year to $218.8 million from $161.4 million in the comparable quarter last year. The increase in revenue was driven by year-over-year growth from share gain in the U.S., European market and higher than expected revenue contribution from new products.
Eight analysts had a consensus revenue estimate of $178.36 million for the fourth quarter.
Revenue from service providers was about 28% of total net revenue for the current quarter,a significant rsie from 18% in the prior year period, as the company company completed a one-time $18 million order by a service provider customer.
Geographically, revenue from North America region increased to $104.3 million from $68.8 million a year-ago, Europe, Middle-East and Africa region revenue shot up to $91.2 million from $76.6 million in the year-ago period. Revenue from Asia Pacific region was $23.3 million, up from $15.8 million in the same quarter last year.
Fourth quarter gross profit increased to $66.4 million from $48.4 million in the year-ago period.Gross margin on a non-GAAP basis was 31.1%, compared to 31.2% in the year ago comparable quarter and non-GAAP operating margin surged to 11.2% from 5.6% in the fourth quarter of 2008.
For the full year, the company reported net income of $9.3 million or $0.27 per share compared to $18.1 million or $0.51 per share a year-ago. Non-GAAP net income declined to $23.7 million or $0.68 per share from $33 million or $0.93 per share last year. Net revenue for the full year was $686.6 million, 8% down from $743.3 million in the prior year.
Analysts expected the company to earn $0.56 per share on revenue of $646.13 million for the full year.
Looking ahead, the company projects first quarter 2010 net revenue to be in the range of $195 million to $205 million, with non-GAAP operating margin in the range of 10% to 11%.
Analysts expect the company to generate revenue of $175.76 million for the first quarter of the fiscal 2010.
NTGR closed Tuesday's regular trading session at $21.76, up $0.62 or 2.93% on a volume of 0.60 million shares on the Nasdaq.In the after hours the shares further rose 14.66% or $3.19, trading at $24.95.
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