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NETGEAR, Inc., a global networking company that delivers innovative products to consumers, businesses and service providers, today reported financial results for the first quarter ended March 30, 2014.
Net revenue for the first quarter ended March 30, 2014 was $349.4 million, as compared to $293.4 million in the first quarter ended March 31, 2013, and $356.6 million in the fourth quarter ended December 31, 2013. Net income, computed in accordance with GAAP, in the first quarter of 2014 was $14.4 million, or $0.39 per diluted share. This compared to GAAP net income of $15.3 million, or $0.39 per diluted share, in the first quarter of 2013, and GAAP net income of $11.4 million, or $0.30 per diluted share, in the fourth quarter of 2013.
Gross margin on a non-GAAP basis in the first quarter of 2014 was 28.9%, as compared to 30.5% in the year ago comparable quarter, and 29.2% in the fourth quarter of 2013. Non-GAAP operating margin was 9.7% in the first quarter of 2014, as compared to 10.0% in the first quarter of 2013, and 10.6% in the fourth quarter of 2013. Non-GAAP net income was $0.59 per diluted share in the first quarter of 2014, as compared to non-GAAP net income of $0.50 per diluted share in the first quarter of 2013, and non-GAAP net income of $0.59 per diluted share in the fourth quarter of 2013.
Our non-GAAP tax rate was 35.2% in the first quarter 2014, as compared to 34.6% in the first quarter of 2013, and 39.6% in the fourth quarter of 2013.
The differences between GAAP and non-GAAP financial measures include adjustments, net of any tax effect, for amortization of purchased intangibles, stock-based compensation, restructuring and other charges, acquisition-related expense and litigation reserves. The accompanying schedules provide a reconciliation of financial measures computed on a GAAP basis to financial measures computed on a non-GAAP basis.
"We are pleased with our results for the first quarter of 2014, which came in at the high end of our guidance range," said Patrick Lo, Chairman and CEO of NETGEAR. "The Service Provider Business Unit had a strong first quarter, while the Commercial Business Unit grew on a sequential and year-over-year basis. For the remainder of 2014, we plan to continue to hold our position as the worldwide market leader in 11ac WiFi routers and extenders, 4G LTE Advanced mobile hotspots and gateways, bonded channel cable and xDSL gateways, 10Gig and PoE SMB switches, and enterprise class SMB storage."
Christine Gorjanc, Chief Financial Officer of NETGEAR, added, "During the first quarter of 2014, we continued to leverage our strong balance sheet and cash position, and under our share repurchase program we bought approximately 495,000 shares of NETGEAR common stock for $15.9 million, or an average price of $32.09 per share. This leaves approximately 2.3 million shares remaining in our open buyback program, and we expect to continue to opportunistically repurchase shares during the second quarter of 2014."
Mr. Lo continued, "For the second quarter of 2014, we are expecting net revenue to be in the range of approximately $335 million to $350 million and non-GAAP operating margin to be in the range of 9% to 10%."
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Net revenue for the first quarter ended March 30, 2014 was $349.4 million, as compared to $293.4 million in the first quarter ended March 31, 2013, and $356.6 million in the fourth quarter ended December 31, 2013. Net income, computed in accordance with GAAP, in the first quarter of 2014 was $14.4 million, or $0.39 per diluted share. This compared to GAAP net income of $15.3 million, or $0.39 per diluted share, in the first quarter of 2013, and GAAP net income of $11.4 million, or $0.30 per diluted share, in the fourth quarter of 2013.
Gross margin on a non-GAAP basis in the first quarter of 2014 was 28.9%, as compared to 30.5% in the year ago comparable quarter, and 29.2% in the fourth quarter of 2013. Non-GAAP operating margin was 9.7% in the first quarter of 2014, as compared to 10.0% in the first quarter of 2013, and 10.6% in the fourth quarter of 2013. Non-GAAP net income was $0.59 per diluted share in the first quarter of 2014, as compared to non-GAAP net income of $0.50 per diluted share in the first quarter of 2013, and non-GAAP net income of $0.59 per diluted share in the fourth quarter of 2013.
Our non-GAAP tax rate was 35.2% in the first quarter 2014, as compared to 34.6% in the first quarter of 2013, and 39.6% in the fourth quarter of 2013.
The differences between GAAP and non-GAAP financial measures include adjustments, net of any tax effect, for amortization of purchased intangibles, stock-based compensation, restructuring and other charges, acquisition-related expense and litigation reserves. The accompanying schedules provide a reconciliation of financial measures computed on a GAAP basis to financial measures computed on a non-GAAP basis.
"We are pleased with our results for the first quarter of 2014, which came in at the high end of our guidance range," said Patrick Lo, Chairman and CEO of NETGEAR. "The Service Provider Business Unit had a strong first quarter, while the Commercial Business Unit grew on a sequential and year-over-year basis. For the remainder of 2014, we plan to continue to hold our position as the worldwide market leader in 11ac WiFi routers and extenders, 4G LTE Advanced mobile hotspots and gateways, bonded channel cable and xDSL gateways, 10Gig and PoE SMB switches, and enterprise class SMB storage."
Christine Gorjanc, Chief Financial Officer of NETGEAR, added, "During the first quarter of 2014, we continued to leverage our strong balance sheet and cash position, and under our share repurchase program we bought approximately 495,000 shares of NETGEAR common stock for $15.9 million, or an average price of $32.09 per share. This leaves approximately 2.3 million shares remaining in our open buyback program, and we expect to continue to opportunistically repurchase shares during the second quarter of 2014."
Mr. Lo continued, "For the second quarter of 2014, we are expecting net revenue to be in the range of approximately $335 million to $350 million and non-GAAP operating margin to be in the range of 9% to 10%."
View at TechPowerUp Main Site