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Logitech Q2 Profit Declines; Backs 2012 Sales Outlook

October 27, 2011 | Hogan Keyser
October 26, 2011 (RTTNews) - Computer interface devices manufacturer Logitech International S.A. reported Wednesday a profit for the second quarter that declined from last year, hurt by a significant drop in margins and continued weakness in Europe, Middle East and Asia or EMEA region. Earnings per share for the quarter topped analysts' expectations, while quarterly revenues missed their estimates by a whisker. The company also maintained its sales forecast for the full-year 2012, which it had lowered in September.

"Our Q2 results are consistent with our expectations and the full-year outlook we presented on September 22," Chairman, acting President and CEO Guerrino De Luca said in a statement.

The Apples, Switzerland-based company reported a net income of $17.45 million or $0.10 per share for the second quarter, lower than $41.16 million or $0.23 per share in the prior-year quarter.

On average, three analysts polled by Thomson Reuters expected the company to report earnings of $0.09 per share for the second quarter. Analysts' estimates typically exclude special items.

Net sales for the quarter edged up a percent to $589 million from $582 million in the same quarter last year, but missed four Wall Street analysts' consensus estimate of $590.62 million by a whisker. Excluding the favorable impact of currency exchange rate changes, sales declined 2 percent.

Net sales through the retail channel grew 2 percent to $501.74 million from the year-ago quarter. Retail sales surged 22 percent in the Asian region and edged down a percent in the Americas region as well as EMEA region.

Sales to OEMs declined 17 percent to $50.26 million from the prior-year quarter, while LifeSize Communications contributed total sales of $37.21 million, up 19 percent from last year.

Among the product families sold through retail channel, all of the products posted sales growth, except pointing devices, video products and digital home products, with audio products now the best performing category in terms of contribution, followed by keyboard & desktops.

Operating income for the quarter was $23.50 million, lower than $51.18 million in the prior-year quarter. Gross margin for the quarter contracted 360 basis points to 33.7 percent from last year's 37.3 percent.

Looking ahead to fiscal 2012, the company continues to anticipate sales of about $2.4 billion, with Street is currently looking for revenues of $2.38 billion.

The company lowered it sales guidance for the year in September following a detailed business assessment conducted by the company over few weeks. It was the second time in as many months that the company was cutting its revenue and operating income outlook for the year.

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