Logitech Boosts 2014 Outlook After Q3 Results Top Estimates

(RTTNews) - Computer interface devices manufacturer Logitech International S.A. (LOGI) reported late Wednesday a profit for the third quarter compared to a hefty loss last year, which included significant goodwill impairment charges.

Adjusted earnings per share and quarterly sales topped analysts' expectations., The company also raised its sales guidance for the full-year 2014, citing the better-than-expected third-quarter performance.

"We're pleased by our solid Q3 performance, with both sales and profit growth. We're encouraged by the robust sales in our growth categories, as well as the success of our ongoing initiatives to improve profitability, which includes the earlier-than-expected return to profitability of LifeSize," President and CEO Bracken Darrell said in a statement.

The company is seeing a turnaround with significant profit improvement after it expanded its presence in the growing tablet accessories category with the launch of a number of exciting new products, and the discontinuance of other non-strategic products, such as speaker docks and console gaming peripherals. It also launched new products for smartphones, the digital home, Macs and Windows 8 PCs.

The Apples, Switzerland-based company reported net income of $48.50 million or $0.30 per share for the third quarter, compared to a net loss of $195.33 million or $1.24 per share in the prior-year quarter.

Results for the year-ago quarter primarily included a goodwill impairment charge of $211 million. Excluding items, adjusted net income for the quarter was $57.95 million or $0.35 per share, compared to $29.98 million or $0.19 per share in the year-ago quarter.

On average, four analysts polled by Thomson Reuters expected the company to report earnings of $0.18 per share for the quarter. Analysts' estimates typically exclude special items.

Net sales for the quarter increased 2 percent to $627.89 million from $614.50 million in the same quarter last year, and topped seven Wall Street analysts' consensus estimate of $595.59 million.

Sales through retail channel increased 3.9 percent to $563.39 million from the year-ago quarter.

Sales to OEMs declined 2.2 percent to $34.54 million from the prior-year quarter, and video conferencing sales decreased 18.6 percent to $29.96 million from last year.

Among the product families sold through retail channel, only three of the nine posted sales growth, with only PC gaming, tablet & other accessories as well as audio wearables & wireless sales improving. The best performing category in terms of contribution continued to be pointing devices.

Gross profit margin for the quarter also contracted 10 basis points to 34.0 percent from last year's 34.1 percent.

Looking ahead to fiscal 2014, Logitech raised it sales guidance to under $2.1 billion from the prior forecast of about $2.0 billion, citing the better-than-expected third-quarter performance. Street is currently looking for full-year 2014 sales of $2.06 billion.

Adjusted operating income for the year is also now expected in a range of $120 million to $125 million, up from the previously expected $100 million.

"We still have more work ahead, but our turnaround is on track as we continue to build a faster and more profitable Logitech," Darrell noted.

LOGI closed Wednesday's regular trading session at $13.22, down $0.07 or 0.53% on a volume of 1.14 million shares.