PC slump hitting Logitech, which posts 3Q loss

Shrinking demand for PCs hurting computer accessories maker Logitech; shares fall on 3Q loss

Associated Press

NEW YORK (AP) -- Shares of Logitech slumped Thursday after the company posted a loss in its most recent quarter, hurt by declining demand for personal computers, and said it would get rid of several businesses.

THE SPARK: Late on Wednesday, Logitech said it lost $194.9 million, or $1.24 per share, over the three months ended Dec. 31. The year before, it reported a profit of $55.3 million, or 32 cents per share. Revenue fell 14 percent to $614.5 million.

Analysts had expected a profit for the company's fiscal third quarter, as well as higher revenue.

THE BIG PICTURE: Logitech International SA, which is based in Switzerland, makes computer accessories such as keyboards and mice, video conferencing equipment and other gadgets.

Consumers are increasingly buying tablets and smartphones, while worldwide demand for PCs drops. That's hurting Logitech, and to offset that, the company will focus on developing more products for smartphones and tablet computers, said CEO Bracken Darrell.

Also contributing to its loss in the most recent quarter was a $211 million charge to write down the value of its video conference unit. The company said that growth in the division, which caters to businesses, has slowed and is weaker than Logitech had expected.

To cope, Logitech is planning another round of cost cuts beyond the $80 million annual savings goal announced last April. It's also exiting its remote control and digital video security businesses and will stop making other products, including speaker docks and console gaming items, by the end of 2013.

SHARE ACTION: Down 68 cents, or 9 percent, to $6.93 in afternoon trading. The stock is down 13 percent since Oct. 24. The following day, Logitech said it expected weak results in the second half of its fiscal year.

Shares have ranged from $6.59 to $11.47 in the past 12 months.

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