Logitech Selling Units as CEO Says Loss Is Unacceptable
Logitech International SA (LOGN), the world’s biggest maker of computer mice, started selling its remote-control and video security businesses after posting a third-quarter loss of $195 million.
“These results are unacceptable and we are taking decisive action as an outcome of my strategic review,” Chief Executive Officer Bracken P. Darrell said in the earnings statement. The company was forecast to report net income of $50.3 million, according to the average of seven analysts surveyed by Bloomberg before yesterday’s statement on the impairment. Logitech had a third-quarter profit of $55 million in the previous fiscal year.
As personal computer sales suffer and demand for mouse-less tablets has risen, Logitech has adjusted its range of devices, which now include wireless solar keyboards for Apple Inc. (AAPL)’s Mac, iPad and iPhone. In October, the Morges, Switzerland-based company announced products for Microsoft Corp. (MSFT)’s Windows 8, including touch mice.
The company has begun to divest its remote control and digital video security businesses and plans to “discontinue other non-strategic products,” including speaker docks, by the end of the year, it said in the statement. Darrell said the company will develop more mobility-related products to tap the growth in smartphones and tablets.
Logitech fell as much as 13 percent, the most in three months, and declined 7.8 percent to 6.64 Swiss francs at 11:06 a.m. Zurich time. The stock dropped 5.5 percent last year after slumping 59 percent in 2011.
“As we articulated when we started the third quarter, continued weakness in the global PC market was the primary factor in our disappointing Q3 results,” said Darrell, who is also the company president.
The company said yesterday it took a $211 million non-cash impairment charge in the quarter on its video conferencing unit, citing a “slowdown in recent quarters” in that industry.
Third-quarter sales fell 14 percent to $615 million, with the impairment leading to an operating loss of $180 million. Without the one-time loss, operating income would have been $31 million, the company said. Gross margin narrowed to 34.2 percent from 36.2 percent a year ago.