Netgear Misses Q4 Sales Target

Revenue from Netgear's wireless and broadband products in the fourth quarter was driven by seasonal holiday consumer demand in the United States and Europe, increased sales of new products and further channel penetration, said Patrick Lo, chairman and CEO of Netgear, Santa Clara, Calif., during a conference call Thursday.

"We believe we can continue to gain market share as the penetration of broadband continues to grow," Lo said.

Revenue would have been higher but for a longer-than-expected delay in port traffic in the Los Angeles area from the beginning of October through the end of November, Lo said.

"We definitely missed some revenue opportunities," Lo said. "We could have used more air freight to compensate for the short supply in November, but we decided against it because of its negative impact on our margins," Lo said.

For the quarter ended Dec. 31, Netgear reported earnings of $8.6 million, or 26 cents per share, up from $3.9 million, or 12 cents per share, the same quarter a year ago.

Excluding items, the company reported adjusted earnings of $7.6 million, or 23 cents per share, up from $4.4 million, or 14 cents per share, a year ago.

Revenue for the quarter climbed to $105.1 million, up 21 percent from $86.8 million for the same period the previous year.

Financial analysts expected the company to report earnings of 21 cents per share on revenue of $108 million, according to Thomson Financial/First Call.

For 2004, the networking vendor reported earnings of $23.5 million, or 72 cents per share, up from $13.1 million, or 49 cents per share, in 2003.

Excluding extraordinary items, the company reported earnings of $23.7 million, or 73 cents per share, for the year, up from $11 million, or 41 cents per share, in 2003.

Revenue for the year grew to $383.1 million, compared with $299.3 million in 2003.

Analysts expected the company to report earnings of 72 cents per share on revenue of $386 million.

For the first quarter, Netgear expects to report revenue of $105 million to $107 million.

Shares of Netgear closed up 3 cents at $16.60 Thursday prior to the announcement.