Logitech International SA
) reported financial results for the second quarter of fiscal
2013, with earnings of 35 cents a share comprehensively beating
the Zacks Consensus Estimate of 10 cents by 250%. Net income for
the quarter soared 223% year over year to $55 million.
The increase in the net income was primarily attributable to a
net tax benefit of $32 million in the quarter
Net sales in the second quarter of 2013 stood at $548 million,
down 7% year over year. Excluding the adverse impact of currency
translation, sales were down 4% year over year. The decline in
revenues was primarily due to greater-than-expected weakening of
the PC market. The general slowdown in the emerging markets also
had a negative impact on the company's top line.
Sales by Channel
During the quarter,
sales declined 5% year over year to $476.5 million. The reduction
was due to lower sales from the EMEA region (down 3%), Americas
(6%), Asia (7%), Lifesize (7%) and OEM (27%).
Sales by Product Division
Keyboards & Desktops was the best-performing retail
product category in the reported quarter Q2, with sales
increasing 20% year over year to $130.8 million. However, this
increase was fully offset by a decline of 8% in pointing devices
to $122.5 million, 13.5% decrease in auto devices revenue to
$109.8 million and 17.3% drop in video revenue to $47.4 million.
Moreover, gaming revenues and digital home revenues were down by
1% and 31.2%, respectively.
Income and Expenses
Gross margin for the quarter was 35.8% compared with 33.7% in
the year-ago quarter. This increase in gross margin was driven by
tight management of channel-pricing programs and a variety of
efficiency improvements in the global supply chain.
Operating income for the quarter was $24 million, up 3% from
$23 million in the same quarter last year. Operating expenses for
the second quarter of 2013 were $171.9 million, down 2% year over
Balance Sheet & Cash Flow
As of March 31, 2012, cash and cash equivalents were $360
million and shareholder's equity was $1.0 billion.
Net cash provided by operating activities was $16.0 million at
the end of the quarter versus a negative of $2.1 million in the
prior year period. During the quarter, the company paid a
one-time dividend of $133 million. Capital expenditures incurred
during the quarter were $10.9 million.
Logitech International, which faces stiff competition from
Electronics for Imaging, Inc.
), retains a Zacks Rank of #5, implying a short-term Sell rating
on the stock.
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