Prior to a debriefing with financial analysts and investors today, Logitech International SA LOGI surprised investors with a great news. This involved a long-term capital allocation plan via dividend and share buybacks.Along with this, the company disclosed the reiteration of its 2015 guidance and provided its 2016 outlook.
Investors’ Delight
Logitech stated its intention of returning up to $500 million in cash to its stockholders in a span of three years. This comprises a $250 million dividend payout plan, which will complement the company’s existing $250 million share repurchase program for the specified time frame.
Further, at its next annual general meeting, Logitech is planning to propose for a Swiss franc equivalent of an $85 million dividend for the year 2015, to its board of directors. Notably, as per Logitech’s current conversion rate and shares outstanding count, this signifies around CHF 0.52 per share – double compared to 2014 dividend rate of CHF 0.26 per share.
Guidance in Focus
Taking about the guidance, Logitech continues to expect its 2015 sales to be around $2.11 billion and non-GAAP operating income to be approximately $185 million. On the other hand, Logitech anticipates its 2016 sales to be about $2.15 billion and non-GAAP operating income to be around $150 million.
Going forward, Logitech expects its sales to be benefited by improving operations. However, the company projects the strengthening U.S dollar to significantly affect its financials. Nevertheless, Logitech is working towards neutralizing the impact of the appreciating U.S. dollar through pricing adjustments and global cost structure reductions.
In Conclusion
In our view, Logitech’s plans to boost shareholders’ wealth will enhance investors’ confidence in the stock. Also, the company’s dedicated efforts to combat the negative currency fluctuation effect are poised to improve its financial results, going forward.
Encouragingly, Logitech enjoys a strong position in the mobile speakers and PC gaming market and has been further strengthening its foothold with new product launches. Recently, this leading computer peripherals maker introduced a new Logitech G series product – Logitech G303 Daedalus Apex Performance Edition Gaming Mouse (read more: Logitech (LOGI) Woos Gamers with G-Series Mouse Launch).
Currently, Logitech has a Zacks Rank #3 (Hold). Better-ranked stocks in the computer peripheral market worth considering include Alps Electric Co. Ltd. APELY, Mercury Systems, Inc. MRCY and Synaptics Inc. SYNA. Alps Electric carries a Zacks Rank #1 (Strong Buy), while both Mercury Systems and Synaptics sport a Zacks Rank #2 (Buy).
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Be the first to comment