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Finance

Logitech sales drop 2% in Q3

Fri 22 Jan 2010 10:54am GMT / 5:54am EST / 2:54am PST
HardwareFinance

But peripheral firm calls latest quarter a "turning point"

Peripheral firm Logitech saw sales drop by 2 per cent in the third quarter of fiscal year 2010 - but the company says it is on track to emerge even stronger from the economic downturn.

Sales for the quarter were $617 million - down from $627 million in the same quarter last year. Excluding the favourable impact of exchange rate changes, sales decreased by 7 per cent.

However, operating income during Q3 grew 37 per cent to $58 million, compared to $43 million the year prior. That total included a $5.8 million one-time transaction related to the company's acquisition of LifeSize Communications in December 2009.

Net income was $57 million - or $0.32 per share - compared to $40 million - $0.22 per share - the year prior.

Retail sales, said the company, grew by 3 per cent year-on-year, with sales up by 8 per cent in the Americas, 6 per cent in EMEA and down 17 per cent in Asia.

Gaming retail sales specifically dropped from $38.1 million to $36.3 million.

OEM sales - those made from manufactured products sold through external companies - were down by 38 percent. The company's contract manufacturing, distribution and logistics sector is stated as an important part of the Logitech business, representing 15 per cent of overall sales in fiscal 2009.

"Q3 marks a turning point in our plan to emerge stronger from the economic downturn," commented Gerald P Quindlen, Logitech president and CEO. "There were many highlights in the quarter, starting with improved sell-through in all of our retail regions, driven by the success of our new products across multiple categories.

"We are also very pleased with our return to year-over-year profitability growth in Q3, driven by the substantial improvement in gross margin, as well as with our outstanding working capital management, which yielded cash flow from operations of $166 million. For the current quarter, we anticipate accelerating sales momentum, resulting in our return to double-digit sales growth, as well as a substantial improvement in profitability compared to Q4 FY 2009."

For its third quarter outlook, Logitech said it expects sales within the range of $500-515 million with operating income of $15-20 million.

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