Netgear (NTGR) shares tumbled 6.31% in after-hours trading on Wednesday following the release of its third-quarter earnings report, which revealed ongoing challenges for the networking equipment manufacturer. The company reported a net loss and provided a cautious outlook for the upcoming quarter, disappointing investors.
For the third quarter, Netgear posted revenue of $184.561 million, but failed to translate this into profitability. The company reported a net loss of $4.777 million and an operating loss of $7.069 million. The operating margin fell into negative territory at -3.8%, while the gross margin stood at 39.1%. These figures indicate that Netgear is struggling with cost management and operational efficiency in the current market environment.
Adding to investor concerns, Netgear's outlook for the fourth quarter suggested potential headwinds ahead. The company forecasted Q4 revenue in the range of $170-185 million, which could represent a sequential decline from Q3 results. This conservative guidance, combined with the Q3 losses, likely triggered the sharp sell-off in after-hours trading as investors reassessed their expectations for the company's near-term performance and profitability.
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