Shares of NETGEAR (NTGR) surged 5.08% on Wednesday, following the company's better-than-expected third-quarter 2024 earnings and revenue results. The networking equipment maker reported non-GAAP earnings of 17 cents per share, beating analyst estimates of a 4-cent loss. Revenues of $182.9 million also exceeded consensus expectations, driven by a 27.1% sequential improvement and strength in certain product lines.
A key highlight of NETGEAR's Q3 performance was the successful completion of its destocking plan, which led to a $27 million reduction in inventory. This strategic move is expected to align the company's sell-in with sell-through, improving revenue predictability and visibility for its channel partners. Additionally, NETGEAR witnessed a 22% spike in recurring revenues, reaching 555,000 subscribers.
While overall revenues declined 7.6% year-over-year, the company's NETGEAR for Business (NFB) segment, driven by strong demand for ProAV managed switch products, grew 11.4% compared to the previous year. On the flip side, the Connected Home (CHP) segment, which includes Orbi, Nighthawk, and Armor brands, saw an 18.1% year-over-year decline in revenues, though it improved sequentially by 24.1%.
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