Yahoo Finance Logitech Beats Q3 Earnings Again, Guides Higher Profit - Analyst Blog
The Switzerland-based computer peripherals company, Logitech International SA (LOGI) declared third-quarter fiscal 2015 adjusted earnings of 41 cents per share, surpassing the Zacks Consensus Estimate of 30 cents by 36.7% and the year-ago quarter figure of 35 cents by 17.1%.
The strong quarterly results are attributable to improved performance across all its segments, primarily led by PC Gaming and Mobile Speakers. Also, Logitech experienced a significant increase in its operating income. Prompted by another quarter of strong results, the company raised its fiscal 2015 operating income guidance for the second time.
Behind the Headlines
Net sales increased 0.9% year over year to $634.2 million and exceeded the Zacks Consensus Estimate of $631 million.
Based on channels, Logitech’s Retail sales increased 1.7% year over year to $574.0 million. On the other hand, OEM sales declined 12.3% year over year to $30.3 million and Video Conferencing sales slipped 0.2% to $29.9 million.
On the basis of Retail category Product Division, PC Gaming posted a 20.7% year-over-year increase in revenues, while Tablet & Other Accessories revenues were weak, reflecting a 28.4% year-over-year decline. Nevertheless, Mobile Speakers demonstrated remarkable growth with a robust 82.1% increase in revenues over the prior-year quarter.
Adjusted gross margin improved to 36.6% compared with 34.5% a year ago. Conversely, adjusted operating expenses rose 3.8% year over year to $156.0 million. Consequently, adjusted operating income increased 14.3% year over year to $76.4 million.
Liquidity
As of Dec 31, 2014, Logitech’s cash and cash equivalents stood at $516.6 million, as compared to $379.9 million as of Dec 31, 2013.
Also, the company’s operating cash flow stood at $232 million as of Dec 31, 2014 – an 86% rise on a year-over-year basis.
Guidance
For fiscal 2015, Logitech raised its adjusted operating income guidance to approximately $185 million from around $170 million.
However, the company lowered its sales outlook for fiscal 2015 to about $2.11 billion from $2.16 billion guided earlier. The revised guidance reflects the negative effect of the strengthening U.S. dollar.
Looking Ahead
Keeping its winning streak alive, Logitech came up with impressive quarterly results yet again. The company enjoys a strong position in the mobile speakers and PC gaming market and has been further strengthening its foothold with new product launches. Also, Logitech has been benefiting from the growing adoption of new mobile platforms, such as tablets and smartphones in both mature and emerging markets. Although the appreciating U.S. Dollar remains a concern for the company, an improving operational performance is surely helping it to tide over.
Currently, Logitech has a Zacks Rank #2 (Buy). Other stocks in the computer peripheral market worth considering include Analogic Corp. (ALOG), Mercury Systems, Inc. (MRCY) and Planar Systems Inc. (PLNR). While Analogic sports a Zacks Rank #1 (Strong Buy), both Mercury Systems and Planar Systems have the same Zacks Rank as Logitech.
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