Benzinga | Feb 2, 2021 10:09AM EST

Earnings Preview: Netgear

Netgear (NASDAQ:NTGR) announces its next round of earnings this Wednesday, February 03. Here is Benzinga's everything-that-matters guide for this Wednesday's Q4 earnings announcement.

What Are Earnings, Net Income, And Earnings Per Share?

Earnings and EPS are useful metrics of profitability. Total earnings also known as net income is equal to total revenue minus total expenses. Dividing net income by the total number of shares outstanding yields EPS.

Earnings And Revenue

Based on Netgear management projections, analysts predict EPS of $0.84 on revenue of $346.28 million. In the same quarter last year, Netgear reported EPS of $0.34 on revenue of $252.97 million.

What Are Analyst Estimates And Earnings Surprises, And Why Do They Matter?

Analysts who cover this company will publish forward-looking estimates of its revenue and EPS each quarter. Averaging together every EPS and revenue prediction that each analyst makes about a company in a quarter yields the "consensus estimates." A company posting earnings or revenue above or below the consensus estimate is known as an "earnings surprise" and may move the stock by a considerable margin.

The analyst consensus estimate would represent a 147.06% increase in the company's EPS figure. Revenue would be up 36.89% on a year-over-year basis. Here is how the Netgear's reported EPS has stacked up against analyst estimates in the past:

Quarter Q3 2020 Q2 2020 Q1 2020 Q4 2020EPS Estimate 0.66 0.22 0.16 0.29EPS Actual 1.13 0.54 0.21 0.34Revenue Estimate 313.51 M 235.29 M 214.40 M 245.79 MRevenue Actual 378.11 M 280.05 M 229.96 M 252.97 M

Stock Performance

Shares of Netgear were trading at $42.69 as of February 01. Over the last 52-week period, shares are up 66.0%. Given that these returns are generally positive, long-term shareholders should be content going into this earnings release.

Do not be surprised to see the stock move on comments made during its conference call. Netgear is scheduled to hold the call at 17:00:00 ET and can be accessed here.