Attributes the loss to decline in demand and strengthening US dollar
Networking equipment supplier Netgear has reported a net loss of $6.67m for the fourth quarter 2008, compared to a $12.5m profit in the year-ago quarter, on revenue down 19% at $161.35m. The loss was attributed to decline in demand and strengthening US dollar.
Operating income fell 93% to $1.2m, while diluted net loss per share was $0.22 compared to $0.35 in the same period last year. During the quarter the company repurchased 1.2 million shares of its common stock for approximately $12m.
Revenue from service providers was approximately 18% of total net revenue, compared to 23% a year ago. Geographically, North America revenue fell 1% to $68.8m, EMEA revenue fell 28% to $76.68m, and Asia Pacific revenue fell 27% to $15.8m.
During the quarter it completed the acquisition of integrated security appliances firm CP Secure for $17.5m to expand its security applications portfolio for SMBs. It also implemented cost-cutting initiatives in order to save over $10m on an annual basis.
For fiscal 2008, the company reported a 46% decline in net income to $17.7m compared to $45.95m a year ago, on revenue up 2% at $743.34m.
Patrick Lo, chairman and chief executive at Netgear, said: In the quarter, we saw weakening in the macroeconomic environment and end-market demand. Fourth-quarter operating income and revenue were unexpectedly weighed down by rapid declines in value of foreign currencies against the US American dollar: 13% in the British pound, 10% in the Euro, and 17% in the Australian dollar. We experienced a foreign exchange loss of $6.6m on net assets primarily related to accounts receivable and cash denominated in foreign currencies. During Q4, we implemented a hedging program with the intent of minimizing foreign currency re-measurement gains or losses in the future.