Logitech International SA (LOGN) rose to the highest price in almost three years as the world’s biggest maker of computer mice raised its full-year sales and profit forecast after third-quarter results beat analyst estimates.
The shares surged 12.7 percent to 13.75 Swiss francs at 11:51 a.m., the biggest rally since April 2012, giving the company a market value of 2.38 billion francs. The stock earlier advanced as much as 15 percent.
Logitech boosted its outlook for sales to just under $2.1 billion, compared with a previous prediction of $2 billion. The company also raised its forecast for (non-GAAP) operating income to $120 million to $125 million, up from an earlier forecast of $100 million.
“Logitech’s operating result was clearly above market expectations,” Andreas Mueller, an analyst at Zuercher Kantonalbank AG in Zurich with a buy rating on the stock, wrote in a note to clients today. “The lower operating costs thanks to its cost-cutting program and the surprisingly low sales was encouraging and once again underlined the turnaround. The consensus estimates for the fiscal year 2014 are thus clearly too low.”
The improved outlook comes as the company reported third-quarter net income of $48.5 million, beating a $31 million analyst projection, while sales amounted to $628 million. That also exceeded an average analyst estimate of $594.7 million, according to figures compiled by Bloomberg.
“We’re encouraged by the robust sales in our growth categories, as well as the success of our ongoing initiatives to improve profitability, which includes the earlier-than-expected return to profitability of LifeSize,” said Chief Executive Officer Bracken Darrell, referring to LifeSize Communications Inc., the videoconferencing unit the company bought in 2009.
“We still have more work ahead, but our turnaround is on track as we continue to build a faster and more profitable Logitech,” Darrell said in the company's e-mailed release.
To contact the reporter on this story: Corinne Gretler in Zurich at email@example.com