Logitech Profit Rises but Falls Short of Forecasts
Logitech, the world's largest maker of computer mice, posted a more than 40 percent jump in third-quarter profit, boosted by strong demand for Harmony remote controls and keyboards.
Net income was $134 million, or 71 cents per share, compared with $94 million, or 49 cents per share in the same quarter a year ago, said the Swiss-based company, which is traded on the Swiss Exchange and on the Nasdaq in New York.
Analysts on average were expecting $138 million in third-quarter profit, according to Reuters Estimates. Shares of Logitech dropped sharply on the Nasdaq Thursday.
Logitech said operating income rose 17 percent to $116 million and sales rose 13 percent to $744 million in the quarter ended Dec 31, 2007.
For the current fiscal year, ending March 31, 2008, the company confirmed its sales target of 15 percent growth and increased its year-over-year operating income growth goal to more than 20 percent. The previously stated goal for operating income growth was 20 percent.
Full-year 2008 gross margin is expected to be above the high end of the long-term target range of 32-34 percent, Logitech said.
Looking ahead, it set preliminary financial targets of 15 percent growth in both sales and operating income for fiscal 2009, ending March 31, 2009.
"We are very pleased with our Q3 performance," said President and Chief Executive Officer Gerald Quindlen. "We delivered record sales and our best gross margin ever, despite a highly promotional retail environment."
He noted Logitech's retail sales in the third quarter grew by 9 percent year-over-year, increasing by 9 percent in the Americas, 4 percent in Europe and the Middle East and 44 percent in Asia Pacific. The growth in the Americas and Europe was restrained by continued weakness in the webcam category, the company said.
Retail sales in all regions were driven by strong demand for Harmony remote controls, keyboards and mice. Sales of Harmony remote controls increased by 72 percent, with strong growth in all regions. Keyboard sales increased by 32 percent and mice sales increased by 22 percent.
OEM sales grew by 54 percent, driven by strong demand for microphones for console singing games, it said.
Markets have speculated recently that Logitech could be bought by rival Microsoft .