Logitech International SA (LOGN)’s Guerrino De Luca has taken back the position of chief executive officer, a role he held for 10 years, after the world’s biggest maker of computer mice lost more than four-fifths of its value since he quit the job to become chairman.
De Luca, who was CEO between 1998 and 2008, has replaced Gerald Quindlen, who stepped down, while Logitech looks for a permanent president and CEO, it said in a statement today. The stock of the Romanel-sur-Morges, Switzerland-based company has plunged more than 80 percent since De Luca was succeeded by Quindlen as CEO on Jan. 1, 2008.
“The company has a confidence issue and De Luca’s comeback may help restore some of it,” Michael Foeth, an analyst at Vontobel Holding AG, said in a telephone interview. “Still, he needs to show that he can improve the business.”
The company posted a first-quarter loss wider than analysts’ estimates after sales in the Europe, Middle East and Africa region declined and it took a $34 million charge for cutting the price of its Revue set-top box. The net loss in the quarter ended June 30 was $29.6 million compared with net income of $19.5 million a year earlier. The average of eight analysts’ estimates compiled by Bloomberg was for a loss of $2.1 million. Sales were little changed at $480.4 million.
Logitech fell 6.9 percent, the biggest drop since April 1, to close at 7.645 Swiss francs in Zurich. The company has a market value of 1.46 billion francs ($1.82 billion).
“We’re searching for a new CEO externally,” De Luca said in an interview today. “There is no target timing. I’ll be here for as long as it takes to find the right person.”
There is “an issue of confidence around the company,” De Luca said. “And that’s reflected in the stock, which is largely undervalued. We plan to do much better and restore confidence.” He added that buying back shares remains a priority.
Logitech has been affected by the proliferation of tablet computers, which may erode its traditional desktop and notebook business. The company appointed Marcel Stolk to head sales and marketing for its Europe, Middle East and Africa, or EMEA, sales region to help “fix Europe,” Quindlen said in April. The company is also betting on emerging markets such as China, Brazil, Russia and India to boost revenue.
Revue’s Price Cuts
EMEA sales fell 14 percent in the first quarter while Asia revenue grew by 29 percent, the company said.
It will take the rest of the fiscal year “to fully implement operational changes” needed to get the EMEA region “back on track,” Logitech said in a presentation on its website.
Logitech, which also produces home-entertainment control, gaming and wireless devices, cut its forecast for sales in the fiscal year through March 2012 to about $2.5 billion from about $2.6 billion, the company said. Operating income for the year is forecast to be $143 million or more, compared with the company’s earlier projection of $185 million.
Logitech said in April it would cut the price of its Revue device for Google Inc. (GOOG)’s Web television offering by 17 percent to attract buyers after a “slow start.” The company said today it plans to cut the retail price of Revue to $99 from $249 during the current quarter. Logitech began selling Revue in the U.S. in the last quarter of 2010.
De Luca said today that enhancements to the Google TV platform are expected by the end of September and they include a new user interface and an applications store.
Revenue at LifeSize Communications Inc., the videoconferencing business that Logitech bought in 2009 for $405 million, rose 34 percent to $36.5 million in the first quarter, making it Logitech’s fastest growing business.
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