Logitech Falls as Loss Is Bigger Than Estimated: Zurich Mover
Logitech International SA (LOGN) declined in Paris trading after the world’s biggest maker of computer mice reported a first-quarter loss that was more than twice as big as analysts had estimated.
Logitech dropped 1.6 percent to 8.81 Swiss francs in Zurich, the lowest price since April 26, giving the Morges, Switzerland-based company a market value of 1.69 billion francs ($1.73 billion). The net loss in the quarter ended June 30 widened to $52.1 million from $29.6 million a year earlier as Logitech had one-time charges for job cuts, Logitech said in a statement. Analysts had predicted a loss of $20.3 million, according to the average of estimates compiled by Bloomberg.
The net loss “is clearly disappointing, short of expectations and suggests that Logitech probably again also needed to lower prices in order to help clear inventories in the channel,” Stefan Gaechter, an analyst at Helvea, wrote in a note today. “Logitech has again refrained from issuing a quantitative guidance for the full fiscal year 2013, stating that the company is still in the middle of a turnaround.”
The proliferation of tablet computers that don’t need mice has eroded Logitech’s traditional desktop and notebook business. The company is seeking to improve its offering, delivering “fewer but more compelling products,” and in May introduced a wireless solar keyboard for Apple Inc. (AAPL)’s Mac, iPad and iPhone, which has solar cells for charging and allows switching among multiple devices with the push of a button.
Revenue dropped 2 percent to $469 million in the quarter, compared with analysts’ average estimate of $463.6 million.
The company, which also produces gaming hardware, last month predicted pretax charges in the current fiscal year of $35 million in connection to its restructuring plan. The first- quarter results included $34 million of restructuring-related costs of which $31 million was previously announced, according to the statement.
“We incurred several one-time charges in the first quarter that are expected to positively impact future profitability,” Chairman Guerrino De Luca said in the statement. The company plans to introduce most of its new products in the current quarter and the following three months, he said.
In April, Logitech said it cut a layer of management to help save $80 million a year. Leaders of business groups and sales regions will report directly to Bracken P. Darrell, who will succeed Guerrino De Luca as chief executive officer next year as the company seeks to revamp its products.
“We’re on track for a turnaround in the second half and we’re very confident about our product portfolio for the Christmas shopping season,” Darrell said in a phone interview today. “The macroeconomic situation affects everyone but the most important driver for us is to have a compelling portfolio.”
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