), a leading company in the field of digital products, announced
its plans to take up cost-cutting initiatives.
LOGI, which has been reporting poor results for the last few
quarters, reported a loss of $1.24 per share in the third quarter
of 2013, with an operating expense of $765 million, up 43.2% year
over year. The company's first quarter 2013 results were also
disappointing in which the company also posted a net loss of 32
cents a share. Such a prolonged weak performance of the company
made it essential for management to take up cost cutting
As announced in the outlook for third quarter, the company
started the procedure to divest its remote control and digital
video security categories with further plans to discontinue other
non-profitable products, such as speaker docks and console gaming
peripherals, by the end of 2013.
Logitech believes that by adopting these cost control measures
the company will not only become a more focused company but will
also hel Logitech reduce its costs. Through these initiatives
Logitech intends to generate incremental savings amounting to
approximately $16 to $18 million. This amount is incremental to
the $80 million saving already proposed from reducing operating
costs and cost of goods sold for fiscal 2014.
Following the restructuring operations, the company expects to
save approximately $12 million to $14 million in the fourth
quarter of fiscal 2013. These savings will mainly come in from
the workforce reduction. Logitech is required to lay off 140
employees, or 5% of its workforce as part of its cost cutting
Logitech's newly appointed CEO Bracken P. Darrell, believes
that these initiatives would result in improved operational
efficiency and higher profitability coupled with faster growth in
performance. In response to these restructuring activities
Logitech shares moved up to $6.80, compared with its previous
Currently Logitech rates a short-term Zacks Rank #5 (Strong
Sell), while its competitors
) has a Zacks Rank #3 (Hold).
IMMERSION CORP (IMMR): Free Stock Analysis
LOGITECH INTL (LOGI): Free Stock Analysis
STRATASYS LTD (SSYS): Free Stock Analysis
To read this article on Zacks.com click here.