Swiss tech firm Logitech (NASDAQ:
) is on the downslide after a weak earnings release.
The highlight (or lack thereof) is a net loss of $1.24 per
share, missing estimates by $1.55. Analysts expected the computer
hardware and software maker to pull off a positive
EPS of $0.31
.Year-over-year, EPS was down nearly 500 percent.
Sales were also down big during the quarter. After finishing
the third fiscal quarter of 2012 at $715 million, Logitech raked
in $615 million during the most recent period.
Most notably, the company saw a 23 percent decline in original
equipment manufacturer (OEM) sales. Also, the Swiss firm
struggled with retail sales in Europe, the Middle East and Africa
(EMEA), with sales down 20 percent on this part of the globe.
Retail sales in the Americas and Asia fared better, but were
still down eight and 11 percent, respectively.
Credit Suisse Downgrade
As a precursor to its earnings woes, Logitech dropped a notch
on the ratings scale on January 15.
As American Banking & Market News
, research analysts at Credit Suisse downgraded the struggling
firm from Neutral to Underperform.
Less PC Sales, More Trouble for Logitech
Logitech suffers from the same problem as Dell (NASDAQ:
). With much of its lineup involving PC peripherals, consumer
gravitation toward mobile devices has moved the company's core
products toward increasing obsolescence.
As President and CEO Bracken P. Darrell states, "As we
articulated when we started the third quarter, continued weakness
in the global PC market was the primary factor in our
disappointing Q3 results."
If PC sales continue to decline - a likely scenario - the
future for Logitech is very much in doubt. According to Darrel,
"We are developing more mobility-related products, leveraging the
powerful growth of tablets and smartphones." However, he goes on
to say, "We intend to sustain our leadership in PC
platform-related products where we have engineering, distribution
and scale advantages. Our goal with PC-platform products is to
maximize profitability, while investing selectively in growing
Thus, while Logitech appears to recognize the growing demand
for mobile products, it looks like it will remain focused on
PC-related products for the time being - perhaps at its own
As mentioned, Logitech is down in trading on Thursday. In the
late morning hours, it is down nearly eight percent.
After rallying to finish at $7.61 on Wednesday, it now sits at
around $7. As of this writing, the stock is at its lowest point
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