Logitech Drops Most in 9 Years on Sales Forecast
Logitech International SA (LOGN) fell the most in more than nine years in Zurich trading after the world’s biggest maker of computer mice forecast lower revenue and operating profit in their second half than a year earlier.
The shares declined 16 percent, the steepest drop since July 2003, to 6.92 Swiss francs, giving the company a market value of 1.33 billion francs ($1.42 billion).
“Logitech needs growth to get back on track, but it’s not happening yet, despite numerous new product launches,” Michael Foeth, an analyst at Vontobel Holding AG (VONN), wrote in a note today. “While the full potential of the new products will only show in the current Christmas quarter, the outlook provided is weak.”
As tablet computers that don’t need mice erode Logitech’s traditional business in personal computers, the company is working to revive its range. In May, Logitech introduced a wireless solar keyboard for Apple Inc. (AAPL)’s Mac, iPad and iPhone and this month it announced products for Microsoft Corp.’s Windows 8, including touch mice.
“The PC market weakened more significantly than anticipated, in advance of the launch of Windows 8,” Chairman Guerrino De Luca said in the statement. “Given the uncertainty in the PC market, we are now planning for continued strong headwinds in all of our PC-related categories for the remainder of the fiscal year.”
The company said it expects the PC market “weakness” to more than offset the positive effect of its new products and predicted sales and operating income for the second half of fiscal year 2013 to be lower than a year earlier.
Second-quarter net income surged to $54.9 million in the three months ended September from $17.4 million a year earlier, the Morges, Switzerland-based company said in a statement today. Excluding a $32 million benefit from a tax audit, operating income rose 2.8 percent to $24.1 million and sales fell 7 percent to $548 million.
Analysts had predicted net income of $18.2 million on sales of $577 million, according to the averages of estimates compiled by Bloomberg.
The company, which also produces gaming hardware, in April 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 De Luca as chief executive officer next year.
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