Late Wednesday, Logitech International (LOGI), a maker of computer peripherals, posted a steep drop in its second-quarter profit and sales that managed to exceed analysts' estimates. The company also forecast a return to year-over-year profit growth starting in the third-quarter.
The company's net income for the quarter ended September 30, 2009 plunged to $21 million or $0.11 per share from $72 million or $0.39 per share in the comparable quarter last year. Analysts polled by Thomson Reuters expected the company to earn $0.05 per share.
Logitech said that its quarterly sales declined 25% to $498 million from $665 million in the same quarter last year. Excluding the unfavorable impact of exchange rate changes, sales for the quarter were down 24%. Nevertheless, the company's quarterly sales were well above analysts' revenue consensus estimate of $474.40 million.
Logitech's retail sales for the quarter dropped 19% year over year, with sales down by 5% in the Americas, 24% in EMEA (Europe, the Middle East and Africa) and 28% in Asia. OEM (original equipment manufacturer) sales were down by 54%, the company said.
Gross margin for the second quarter was 30.5% compared to 34.3% in the year-ago quarter.
For the six-month period, Logitech reported a net loss of $16.62 million or $0.09 per share, compared to net income of $101.62 million or $0.55 per share in the year-ago period.
The company's net sales for six months declined to $824 million from $1.17 billion in the comparable period last year.
Looking ahead, the company remains optimistic about the third-quarter. Logitech noted that its new products are being well received by customers and will be well represented on retail shelves for the holiday season. Even assuming no improvement in consumer spending, the company expects to return to profit growth starting in the third-quarter.
For the third quarter, Logitech expects sales to range between $575 million and $595 million, which are below analysts' revenue consensus estimate of $622.86 million.
The company also forecast gross margin of approximately 31% and operating income in the range of $45 million to $50 million for the third-quarter.
Commenting on the second-quarter results, Gerald Quindlen, Logitech president and CEO said, "Our Q2 results demonstrate that we continue to deliver on our plan to navigate the downturn. I was pleased that we delivered the predicted return to profitability, driven by a substantial improvement in gross margin compared to Q1 and our ongoing diligence in controlling expenses. Our sales and profitability both benefited from better-than-expected sell-through of our products in the Americas and EMEA."
LOGI, which has been trading in the range of $7.55 - $19.53 over the past twelve months, closed Wednesday's trading session at $18.13, down 0.55% on an above-average volume of 1.74 million shares.
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