Netgear Inc. shares dropped more than 10% in the extended session Monday after the network equipment and router company cut its outlook citing a drop in consumer sales and supply-chain problems from COVID lockdowns in China.
shares were last down 13% after hours, following a 2.6% rise to close the regular session at $23.14. As of Monday’s close, shares are down 41% over the past 12 months, versus a 4.9% gain in the S&P 500 Index
After the close of markets, the company said it was cutting forecast fiscal first-quarter revenue to between $202 million and $212 million, from a previous range of $225 million to $240 million.
Analysts surveyed by FactSet had estimated revenue of $231.6 million based on that previous forecast.
“The U.S. consumer WiFi market, which had exited 2021 at approximately 15% above 2019 levels, declined in the first quarter of 2022, ending roughly flat to 2019 levels,” the company said in a statement. “The decline in market size negatively impacted the performance of our [connected home products] business which saw a decline in revenue relative to our expectations earlier in the quarter.”
“Despite [small-to-medium-sized business] revenue performance meeting expectations, supply of components to our factories were severely disrupted in March due to COVID-induced lockdowns in Shenzhen, resulting in a meaningful lost opportunity to deliver higher SMB revenue in the quarter.”
Netgear has been citing supply-chain problems as hampering its business since last year, a widespread problem among electronics manufacturers as a global chip shortage persists.
Netgear is scheduled to report quarterly results on April 27.