Netgear ( NASDAQ: NTGR ) stock dropped ~7% postmarket on Wednesday as the networking hardware firm issued disappointing Q4 guidance in its earnings report amid supply chain issues and forex headwinds.
The firm expects Q4 net revenue of $235M-$250M, widely missing consensus estimate of $270.56M.
Q4 adj. operating loss margin is expected to be 1-2% and adj. tax rate is estimated to be 23%.
"We expect the SMB business will remain supply constrained, and we will continue to use higher cost air freight as a means to partially mitigate. We are also continuing to work with retail channel partners in the coming quarters to reduce their inventory levels," said CFO Bryan Murray.
"As ~50% of SMB revenue is in foreign currency, we are seeing significant foreign exchange headwinds going from Q3 into Q4," he added.
CEO Patrick Lo noted that the retail networking market declined by double digits in Q3 relative to pre-pandemic levels due to the challenging macroeconomic environment.
"This is causing retail channel partners to further reduce their inventories and we expect this trend to continue into 2023," he added.
Netgear ( NTGR ) reported Q3 adj. EPS of $0.21, while revenue of $249.6M (-14.1% Y/Y), hurt by supply constraints, primarily on SMB and premium CHP products.
Shares of Netgear ( NTGR ) declined 28.3% YTD.
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Netgear stock drops 7% after the bell on disappointing guidance