Netgear 1Q Profit Shrivels But Tops Analyst Views

SAN JOSE, Calif. (AP) — Most of Netgear Inc.'s profit evaporated in the first quarter, but the performance exceeded analysts' even bleaker expectations as sales of the company's computer networking equipment held up better than management expected.

Netgear said Wednesday that it earned $42,000 during the first three months of year, breaking even on a per-share basis. The San Jose-based company made $11.2 million, or 31 cents per share, at the same time last year.

If not expenses for employee stock compensation and other special items, Netgear said it would have earned 5 cents per share. Under the same accounting method, analysts had been bracing for a loss of 8 cents per share, according to Thomson Reuters.

Revenue for the period dropped $23 million to $152 million. Netgear's executives thought the recession would weaken demand even more and had forecast first-quarter revenue ranging from $135 million to $145 million.

The cautious guidance led analysts, on average, to project first-quarter revenue of $139 million.

Netgear's products include computer routers that help households and small businesses create wireless networks.