Logitech Q4 Profit Up 57%, Beats View; Backs 2016 Outlook

(RTTNews) - Computer interface devices maker Logitech International S.A. (LOGI) on Wednesday reported a 57 percent surge in profit for the fourth quarter from last year, reflecting lower expenses and higher margins that helped offset a decline in sales amid currency headwinds.

Adjusted earnings per share for the quarter beat analysts' expectations. Looking ahead to fiscal 2016, Logitech affirmed its forecast for adjusted operating income.

Bracken Darrell, Logitech president and chief executive officer said, "We closed Fiscal Year 2015 with a better-than-expected performance and good momentum in spite of currency headwinds. Our Growth category - Gaming, Tablet and Other Accessories, Mobile Speakers and Video Collaboration - sales grew by 28 percent in constant currency over the full year, accelerating in the fourth quarter to 45 percent growth, the best performance of the fiscal year."

The Switzerland-based company's net income for the fourth quarter was $16.72 million or $0.10 per share, up from $10.62 million or $0.06 per share in the prior-year quarter.

Excluding items, adjusted net income for the quarter was $17.06 million or $0.10 per share, compared to $21.34 million or $0.13 per share in the year-ago quarter.

On average, analysts polled by Thomson Reuters expected the company to report earnings of $0.08 per share for the quarter. Analysts' estimates typically exclude special items.

However, net sales for the quarter declined 5 percent to $467.23 million from $490.32 million in the same quarter last year. Analysts had a consensus revenue estimate of $467.52 million.

But, net sales rose 1 percent in constant currency.

Net sales through retail channel declined 2 percent from the year-ago period to $416.14 million. Sales to OEMs decreased 26 percent from the year-ago quarter to $26.14 million, while sales for video conferencing declined 19 percent to $24.95 million.

Among the product families sold through retail channel, Gaming sales rose 5 percent to $47.34 million, while Tablet & Other Accessories sales increased 17 percent to $26.02 million. Mobile Speakers retail sales surged 98 percent to $38.41 million. Video collaboration revenues more than doubled to $1625 million.

Gross profit margin expanded 60 basis points from last year to 33.5 percent, while operating margin for the increased 130 basis points to 2.5 percent.

Total operating expenses declined 7 percent from the year-ago period to $144.63 million.

Looking ahead, Darrell said, "We will focus on our growing Retail Strategic business. Consequently, we plan to exit our OEM business and reorganize Lifesize to sharpen its focus on its cloud-based offering. We will also streamline our overall cost structure through product, overhead and infrastructure cost reductions, including a targeted resource realignment."

As a result, over the coming year the company expects restructuring charges of about $15 million to $20 million. The company said it will use the savings from all these actions to offset currency headwinds and invest in future growth.

For fiscal 2016, Logitech affirmed its outlook for adjusted operating income of $150 million, despite the stronger currency headwinds, and 7 percent growth for Retail Strategic sales in constant currency.

LOGI closed Wednesday's trading at $14.40, down $0.11 or 0.76 percent on a volume of 881,550 shares.