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Logitech (LOGI) Q3 Earnings & Revenues Top Estimates, Up Y/Y

Zacks Equity Research

Logitech International LOGI reported third-quarter fiscal 2020 results, wherein both bottom and top lines surpassed estimates.

Non-GAAP earnings came in at 84 cents per share, surpassing the Zacks Consensus Estimate of 77 cents. The bottom line also improved from the year-ago quarter’s 79 cents.

Net sales of $903 million surpassed the consensus mark of $899 million and rose 4% year over year in dollars and 5% at constant currency. The year-over-year increase stemmed from strong growth in Gaming, Video Collaboration and PC peripheral segments.

Logitech International S.A. Price, Consensus and EPS Surprise

Logitech International S.A. Price, Consensus and EPS Surprise

Logitech International S.A. price-consensus-eps-surprise-chart | Logitech International S.A. Quote

Segmental Details

Logitech’s Gaming segment’s sales grew 15% year over year to $245.74 million.

Video Collaboration sales witnessed a 24% rally to $91.96 million.

Mobile Speakers’ sales, however, fell 3% to $92.97 million.

Audio & Wearables segment sales declined 17% year over year to reach $81.93 million. Smart Home segment sales fell 19% year over year to $15.79 million.

Logitech’s Creativity and Productivity business comprises four sub-business lines — Keyboards and Combos, Pointing Devices, PC Webcams, and Tablet and Other Accessories. Revenues from Pointing Devices, and Keyboards and Combos grew 4% and 8% year over year, respectively. However, revenues from PC Webcams, and Tablet and Other Accessories declined 3% and 13%, respectively.

The company did not report any revenues from the Other segment in the quarter.

Margins & Operating Metrics

Non-GAAP gross profit rose 3% year over year to $339.61 million. Non-GAAP gross margin, however, contracted 50 basis points (bps) from the year-ago quarter to 37.6%. The impact of tariffs remained an overhang on margins.

Non-GAAP operating expenses inched up 0.8% to $187.97 million.

Non-GAAP operating income climbed 5.9% to $151.65 million. Operating margin of 16.8% expanded 20 bps.

Liquidity

As of Dec 31, 2019, Logitech’s cash and cash equivalents were $656.05 million compared with $574.5 million in the previous quarter.

Additionally, the company generated operating cash flow of $181.12 million in the fiscal third quarter compared with $106.5 million in the prior quarter.

Guidance

Logitech reaffirmed view for fiscal 2020. The company expects non-GAAP operating income of $375-$385 million.

Revenue growth is anticipated in the mid to high-single-digit range at constant currency.

Zacks Rank & Key Picks

The company currently has a Zacks Rank #3 (Hold).

A few better-ranked stocks in the broader technology sector are ManTech International Corporation MANT, SYNNEX SNX and Silicon Motion Technology Corporation SIMO, all sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Long-term earnings growth rate for ManTech, SYNNEX and Silicon Motion is currently pegged at 8%, 12% and 7%, respectively.

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Logitech International S.A. (LOGI) : Free Stock Analysis Report
 
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