Logitech (LOGI) Shares Gain after Earnings Beat Estimates

Shares of Logitech International SA were trading up +1.58 or +11.90 percent to $14.86 per share in Thursday's premarket after the company announced better than expected earnings late yesterday. Logitech International stock closed at $13.28, down -0.77 or -5.48 percent in Wednesday's regular trading session.

Lausanne, Switzerland based Logitech International is a worldwide developer and manufacturer of personal computer and tablet accessories, also known as peripherals.
The company's products include mice, trackballs, game controllers, keyboards and webcams. In addition, Logitech manufactures computer and home speakers, headphones and wireless audio devices and devices for MP3 players and cell phones. Logitech employs over 9,000 people in offices in Europe, the Americas and the Asia Pacific regions.

Logitech reported GAAP net income for its first quarter came to $7.44 million or +$0.04 per share compared to $19.68 million or $0.12 per share in the same period one year ago, a decline of -62 percent. With the exclusion of some items non-GAAP net income was $26.74 or +$0.16 per share versus $36.27 million or +$0.22 per share in 2014's first quarter.

Net sales in the quarter were $470.32 million compared to $482.2 million in the same period one year ago, nevertheless, on a constant currency basis, net sales increased by +4 percent. The analyst consensus was for the company to report earnings of $0.11 per share on revenue of $467.8 million.

Bracken Darrell, Logitech President and Chief Executive Officer said in the company's press release that, "Our first quarter results are encouraging and put us strongly on track for FY 2016. We are on the offensive, focusing on our retail business in order to accelerate our transition to growth - Q1 retail sales grew 7 percent in constant currency.

As for the future, Darrell said, "As planned, we have made excellent progress in preparing the business for the year to come - we're on course to exit OEM by the end of calendar year 2015; we're reorganizing Lifesize around the cloud; and we continue to optimize our costs to invest even more in growth.

The company reported mobile speaker sales had increased an impressive +41 percent to $40.54 million with video collaboration revenue increasing +39 percent to $21.18 million. Net sales through the company's retail channel, about 90 percent of the company's total sales increased to $425.39 million, a gain of 7 percent on a constant currency basis.

Other products sold through the retail channel had gaming sales decline seven percent to $43.67 million with tablets and other accessories dropping 41 percent to $18.81 million. Sales for video conferencing dropped -12 percent to $22.63 million, while sales to Original Equipment Manufacturers (OEMs) declined -32 percent to $22.3 million.

Total operating expenses grew by four percent from the previous year's first quarter to $164.76 million, while gross profit margin contracted 120 basis points from last year to 36.5 percent with operating margin declining by 320 basis points to 1.5 percent. Logitech reaffirmed guidance for its full fiscal 2016 year of adjusted operating income of $150 million with a 7 percent rate of growth for retail sales on a constant currency basis.

Logitech shareholders and the market are expressing their optimism in this morning's premarket. In addition to the earnings beat, Logitech unveiled its new G310 Atlas Dawn Compact Mechanical Gaming Keyboard. The new keyboard offers 25 percent faster actuation than regular mechanical keyboards and has increased durability features and backlighting.

Other News About LOGI

New Logitech Partner Program Designed to Deliver a Seamless Collaboration Experience

Charter members include BroadSoft, C2G, Zoom, Lifesize, Blue Jeans Network and Vidyo.

Logitech Launches First Product Under Logi Label - Analyst Blog

New Logi BLOK cases have cushioned square corners and are available for Apple iPads.

Other Stocks in the News

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Unilever Sales Beat Estimates as Latin America, China Gain

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Published on Jul 23, 2015
By Jay Hawk
Jay Hawk
Jay Hawk enjoyed a 12-year professional financial markets career incorporating extensive first hand futures and options experience obtained by trading in the stock, commodity and forex markets on U.S. exchanges. Since retiring as a full-time financial market professional, he has been actively trading stock, commodities, forex and options for his own account and managing funds for others, as well as writing financial market commentary and educational articles.

Copyrighted 2020. Content published with author's permission.

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