CNET también está disponible en español.

Ir a español

Don't show this again

Tech Industry

Wireless gear boosts NetGear's optimism

The company says it is raising its fourth-quarter outlook, as well as launching a secondary offering on behalf of its shareholders who are selling 9 million shares

NetGear announced Thursday it is raising its fourth-quarter outlook, as well as launching a secondary offering on behalf of its shareholders who are selling 9 million shares.

The improved fourth-quarter performance comes as NetGear sees healthy sales of new products in its core market of wireless networking for the home and small business.

NetGear said it expects to generate between $85 million and $87 million for the quarter ended Dec. 31, compared with its previous


Get Up to Speed on...
Wi-Fi
Get the latest headlines and
company-specific news in our
expanded GUTS section.


forecast of $79 million to $81 million. Wall Street has been expecting the company to report revenue of $80.5 million, according to research firm Thompson.

The company also expects to post earnings for the quarter of between $4 million and $4.4 million, or 13 to 14 cents a share. But excluding a tax benefit, the company's net income expectations are between 11 cents and 12 cents a share, NetGear said.

Analysts have been expecting NetGear to report a profit of 9 cents, according to Thompson.

"We continue to benefit from increased demand in our core small business and home networking markets. Our new products introduced in the third and fourth quarters of 2003 also contributed significantly to the growth of our revenue and profitability," Patrick Lo, NetGear's chief executive, said in a statement.

Although the company raised its fourth-quarter guidance, its shares fell slightly in trading Thursday. Investors may have been concerned about possible dilution of their holdings, when NetGear announced that it would make a secondary offering of 9 million shares. NetGear plans to sell the shares on behalf of certain shareholders, but does not plan to raise any capital for itself by selling stock in the offering.

The company also announced it reached an agreement with some of its largest shareholders, who collectively own roughly 16.3 million shares, to extend the lock-up period for their shares.

These shareholders have agreed to postpone selling any of these shares for another 45 days beyond Jan. 26. That was the original expiration for the lock-up period, which prohibited the sale of their NetGear IPO shares for approximately six months.