Computer interface devices manufacturer Logitech International S.A. (LOGI) reported Wednesday a loss for the fourth quarter compared to a profit last year, reflecting significantly lower margins and sales decline. Loss per share for the quarter came in wider than analysts' expectations, while quarterly revenues topped their estimates by a whisker. Looking ahead, the company expects improved profitability for fiscal 2014, and provided revenue guidance, above Street view.
"Regionally, with the exception of EMEA, our retail business has begun to stabilize. In Europe, the combination of the difficult macro-economic environment and the very slow PC market stalled our business in Q4. For the rest of our retail business (Americas and Asia), sales of our mice and keyboards grew 6 percent, much better than the market for PCs, which was down globally nearly 14 percent year over year," President and CEO Bracken Darrell said in a statement.
The company added that tablets accessories showed strong momentum during the fourth quarter, with the recently launched version of its best-selling ultrathin keyboard cover for the iPad mini as well as a range of new tablet folios.
The Apples, Switzerland-based company reported a net loss of $35.91 million or $0.23 per share for the fourth quarter, compared to net income of $28.29 million or $0.17 per share in the prior-year quarter. Excluding charges, adjusted net loss for the quarter was $14.72 million.
On average, four analysts polled by Thomson Reuters expected the company to report a loss of $0.05 per share for the fourth quarter. Analysts' estimates typically exclude special items.
Net sales for the quarter decreased 12 percent to $469.09 million from $531.96 million in the same quarter last year, but topped four Wall Street analysts' consensus estimate of $466.50 million by a whisker. Excluding currency impact, sales decreased only 11 percent.
Net sales through retail channel declined 10 percent to $408 million from the year-ago quarter. Retail sales grew 2 percent in the Asian region, while it declined 25 percent in Europe, Middle East and Asia or EMEA region, and dropped 2 percent in the Americas region.
Sales to OEMs decreased 21 percent to $32.49 million from the prior-year quarter, and sales for LifeSize Communications, acquired in December 2009, declined 19 percent to $28.90 million from last year.
Among the product families sold through retail channel, only two of the nine product families posted improvement in sales, with pointing devices continuing to be the best performing category in terms of contribution, followed by keyboard & desktops and then PC audio products. Meanwhile, tablet accessories sales increased more than four-fold.
Gross profit margin for the quarter contracted 290 basis points to 33.5 percent from last year's 36.4 percent.
For fiscal 2013, the company reported a net loss of $228.14 million or $1.44 per share, compared to net income of $71.46 million or $0.41 per share last year. Excluding charges, adjusted net loss were $32.26 million. Net sales for the full year declined to $2.10 billion from $2.32 billion a year ago. Street was looking for full-year 2013 loss of $1.26 per share on annual revenues of $2.10 billion.
Looking ahead to fiscal 2014, Logitech currently expects sales of about $2 billion, operating income of about $50 million and gross margin of about 34 percent. Analysts estimate the company to report $1.95 billion in sales for fiscal 2014.
The company noted that it has narrowed its strategic focus; restructured the company, including LifeSize division; and prioritized resources to create great new products for tablets.
"While the PC market continues to weigh upon parts of our business, and the ongoing economic uncertainty in much of Europe shows no signs of improvement, our product portfolio and indications of stabilization in the Americas and Asia, combined with the cost savings resulting from our FY 2013 restructuring initiatives, position us for improved profitability in FY 2014," Darrell added.
LOGI closed Wednesday's regular trading session at $7.08, down $0.04 or 0.56% on a volume of 0.30 million shares.
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