Logitech International’s LOGI quarterly results continue to be battered by soft IT spending, which is hurting the demand for its personal computer (PC) peripheral products, including keyboards, PC webcams, video collaboration and pointing devices.
For Logitech’s recently reported results for the first quarter of fiscal 2024, revenues and non-GAAP earnings per share declined 16% and 12%, respectively, on a year-over-year basis. While the softened demand hurt the top line, lower revenues, along with an unfavorable product mix and foreign exchange pressure, weighed on the bottom line.
Soft Demand Disrupts Q1 Performance
In 2020 and 2021, Logitech had benefited from the elevated demand for its Video Collaboration, PC Webcams, Keyboards & Combos and Pointing Device tools, mainly driven by the heightening of work-from-home and learn-from-home trends.
However, enterprises are now postponing their large IT spending plans due to the weakening global economy amid ongoing macroeconomic and geopolitical issues. Furthermore, continued industry layoffs on growing recessionary concerns are hampering the demand for PC peripheral products by organizations. Additionally, declining consumer spending due to high inflation and interest rates is hurting the demand for PC peripherals.
Logitech International S.A. Price, Consensus and EPS Surprise
Logitech International S.A. price-consensus-eps-surprise-chart | Logitech International S.A. Quote
We also believe that a lack of the need for product refreshes is likely to have negatively impacted the demand for Logitech’s products in the recently reported quarter. The majority of the global working population refreshed PC and related peripheral products about just two years ago in the wake of the pandemic-led work-from-home trend.
Logitech registered a sales decline across the majority of its key product categories on a year-over-year basis. Revenues from PC Webcams, Video Collaboration, Keyboards & Combos, Headsets and Pointing devices plunged 31%, 23%, 21%, 20% and 5%, respectively, year over year.
Zacks Rank & Other Stocks to Consider
Logitech currently carries a Zacks Rank #2 (Buy). Shares of LOGI have risen 14.9% year to date (YTD).
Some other top-ranked stocks from the broader technology sector are Salesforce CRM, Fortinet FTNT and NVIDIA NVDA, each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today's Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Salesforce's second-quarter fiscal 2024 earnings has been revised upward by 21 cents to $1.90 per share in the past 60 days. For fiscal 2024, earnings estimates have moved upward by 33 cents to $7.44 per share in the past 60 days.
Salesforce's earnings beat the Zacks Consensus Estimate in the preceding four quarters, the average surprise being 15.5%. Shares of CRM have surged 70.3% YTD.
The Zacks Consensus Estimate for Fortinet’s second-quarter 2023 earnings has remained unchanged at 34 cents per share in the past 60 days. For 2023, earnings estimates have remained unchanged at $1.46 per share in the past 60 days.
Fortinet’s earnings beat the Zacks Consensus Estimate in the preceding four quarters, the average surprise being 16.4%. Shares of FTNT have rallied 60.2% YTD.
The Zacks Consensus Estimate for NVIDIA's second-quarter fiscal 2024 earnings has been revised northward by a couple of cents to $2.06 per share in the past 30 days. For fiscal 2024, earnings estimates have increased by 2 cents to $7.79 per share in the past seven days.
NVIDIA’s earnings beat the Zacks Consensus Estimate twice in the preceding four quarters while missing the same on two occasions, the average surprise being 0.3%. Shares of NVDA have surged 213% YTD.
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