The Switzerland-based computer peripherals company, Logitech International SA LOGI declared fourth-quarter fiscal 2015 non-GAAP earnings of 10 cents per share, which fell behind the year-ago quarter figure of 13 cents by 23.1% due to decrease in net sales. Adjusting for stock based compensation, Non-GAAP earnings of 8 cents surpassed the Zacks Consensus Estimate of 4 cents by 200%. Encouragingly, Mobile Speakers and Video collaboration segments fared well.
For full year fiscal 2015, non-GAAP earnings of $1.04 per share rose from 78 cents a year back.
Inside the Headlines
For the fourth-quarter net sales dipped 4.7% year over year to $467.2 million and marginally missed the Zacks Consensus Estimate of $468 million. This was due to a decline in sales across retail, OEM and video conferencing segments. Also, for the full year, net sales decreased marginally by 0.7% year over year to $2.11 billion.
In the fourth-quarter fiscal 2015, based on channels, Logitech’s Retail sales dipped 1.9% year over year to $416.1 million. Also, OEM sales declined 25.7% year over year to $26.1 million and Video Conferencing sales slipped 19.4% to $24.9 million on a year-over-year basis.
On the basis of Retail category Product Division, PC Gaming posted a 4.5% year-over-year increase in revenues to $47.3 million, Tablet & Other Accessories revenues rose 17.1% year over year to $26.0 million. Encouragingly, Mobile Speakers and Video Collaboration demonstrated remarkable growth with a robust 98.2% and 140.3% increase in revenues, respectively, to $38.4 million and $16.2 million on a year-over-year basis.
Non-GAAP gross margin improved to 33.7% from 33.2% a year ago. Conversely, non-GAAP operating expenses rose 1.7% year over year to $143.2 million.
Consequently, non-GAAP operating income plummeted 33.6% year over year to $14.5 million.
Liquidity
As of Mar 31, 2015, Logitech’s cash and cash equivalents stood at $537.0 million, as compared to $469.4 million as of Mar 31, 2013.
Guidance
For fiscal 2016, Logitech reiterated its non-GAAP operating income to be around $150 million. The company expects Retail Strategic sales growth of 7% in constant currency. On the other hand, the company continues to expect strong currency headwinds in the fiscal year.
Looking Ahead
Keeping its winning streak alive, Logitech significantly beat the Zacks Consensus Estimate yet again. The company enjoys a strong position in the mobile speakers, Video Collaboration and PC gaming market and has been further strengthening its foothold with new product launches. However, an appreciating U.S. Dollar along with the falling demand for Logitech’s computer accessories remain the main concerns.
Currently, Logitech has a Zacks Rank #3 (Hold). Other stocks in the same sector worth considering include Electronics for Imaging, Inc. EFII, LG Display Co., Ltd. LPL and Sony Corporation SNE. All stocks carry a Zacks Rank #2 (Buy).
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