Logitech Fourth-Quarter Net Drops 89% on Lower Regional Sales
By Chiara Remondini - Apr 27, 2011
Logitech International SA , the world’s biggest maker of computer mice, said fourth-quarter profit fell 89 percent on lower sales in Europe, the Middle East and Africa.
Net income in the quarter ended March 31 declined to $2.8 million from $24.5 million a year earlier, the Romanel-sur- Morges, Switzerland-based company said in a statement. Revenue increased 4 percent to $548 million. Net income had been predicted at $6.5 million on sales of $548 million, according to analyst estimates compiled by Bloomberg.
“The disappointing conclusion was due to weaker-than- anticipated demand in the second half of fourth quarter for our products in Europe, Middle East and Africa,” Chief Executive Officer Gerald Quindlen said in the release.
Logitech lowered its full-year sales and profit forecasts on March 31 because of “projected shortfalls” mainly due to “weakness” in the company’s Europe, Middle East and Africa retail sales region. The company said it had seen lower-than- expected demand for retail products in the region, which accounts for about 45 percent of total sales, from both distribution partners and consumers.
Global personal-computer shipments unexpectedly fell 3.2 percent in the first quarter as businesses and consumers held off on purchasing new machines and shifted focus to tablet computers, market-research company IDC said on April 13. The researcher had projected worldwide shipments would grow 1.5 percent from a year earlier.
Logitech, which also produces home-entertainment control, gaming and wireless devices, bought LifeSize Communications Inc. in 2009 for $405 million to expand into the videoconferencing market.
In the last quarter of 2010, the company started Logitech Revue, a set-top box to access Google Inc.’s TV, which it offers for about $300 in the U.S. The company said at the time it was “confident” about the long-term potential of the Google TV platform, which combines Internet access with on-demand TV.
Logitech forecast revenue will increase to about $2.6 billion in the fiscal year through March 2012 and operating profit will be up to $185 million.
The company in March predicted full-year sales in a range of $2.35 billion to $2.37 billion and operating income between $140 million and $150 million.
The shares rose 1.3 percent to 12.31 francs in Zurich on April 27, giving the company a market value of 2.4 billion francs ($2.8 billion).