Earnings Preview: Netgear

On Wednesday, July 21, Netgear NTGR will report its last quarter's earnings. Here is Benzinga's preview of the company's release.

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

Sell-side analysts expect Netgear's EPS to be near $0.71 on sales of $314.84 million. Netgear reported a per-share profit of $0.54 when it published results during the same quarter last year. Sales in that period totaled $280.05 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.

If the company were to report earnings in line when it publishes results Wednesday, earnings would be up 31.48%. Revenue would be up 12.42% on a year-over-year basis. Netgear's reported EPS has stacked up against analyst estimates in the past like this:

Stock Performance

Shares of Netgear were trading at $36.65 as of July 19. Over the last 52-week period, shares are up 24.62%. 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.