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Logitech (LOGI) Q2 Earnings Beat Estimates, Revenues Up Y/Y

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Logitech (LOGI) Q2 Earnings Beat Estimates, Revenues Up Y/Y

Logitech (LOGI) reports mixed fiscal Q2 results wherein earnings beat estimates but revenues miss the same. However, strong Gaming and Video Collaboration business drives year-over-year improvement.

Logitech International SA LOGI reported second-quarter fiscal 2019 results, wherein both the top line and the bottom line improved year over year.

Non-GAAP earnings came in at 49 cents per share, surpassing the Zacks Consensus Estimate of 46 cents. Earnings also marked an improvement from the year-ago quarter figure of 39 cents.

Net sales of $691.2 million missed the Zacks Consensus Estimate of $695 million but rose 9.3% year over year. Revenue growth stemmed from solid performance in Logitech’s Video Collaboration, Gaming businesses and PC Peripherals category.

Logitech International S.A. Price, Consensus and EPS Surprise

Logitech International S.A. Price, Consensus and EPS Surprise | Logitech International S.A. Quote

Segmental Details

Logitech’s Creativity and Productivity business comprises four sub-business lines — Keyboards and Combos, Pointing Devices, PC Webcams, and Tablet and Other Accessories. Each of these registered year-over-year improvement of 10.7%, 3.8%, 2.5% and 19.2%, respectively, which we believe, is mainly due to a stabilized PC market.

Gaming surged 41.4% year over year to $160.8 million, supported by strong momentum across its latest products. Meanwhile, Video Collaboration grew 24.1% to $57.2 million.

However, the Mobile Speakers business and Smart Home segment put up a disappointing show. Mobile Speaker sales plunged 14.8% to $77.1 million, while the smart home category witnessed sales decline of 49.7% to $9.2 million.

Audio & Wearables also declined 1.3% year over year, alongside a 31.5% fall in the Other category.

Margins & Operating Metrics

Non-GAAP gross margin increased 110 basis points (bps) year over year to 37.6%.

Non-GAAP operating income climbed 18.5% to $84.6 million. driven by a $10 million restructuring credit related to the realignment of resources for growth.Operating margin of 12.2% expanded 90 bps from the year-ago quarter.


As of Sep 30, 2018, Logitech’s cash and cash equivalents were $425 million compared with $604.1 million in the previous quarter. Additionally, the company generated operating cash flow of $84.9 million inthe fiscal second quarter.


Logitech reiterated fiscal 2019 outlook of 9-11% sales growth in constant currency and non-GAAP operating income between $325 million and $335 million.

Zacks Rank & Stocks to Consider

Logitech currently carries a Zacks Rank #4 (Sell).

A few top-ranked stocks in the broader Computer and Technology are Atlassian Corporation TEAM, Twilio Inc. TWLO, and Vishay Intertechnology, Inc. VSH, each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Long-term earnings growth of Atlassian, Twilio and Vishay is pegged at 13.5%, 9%, and 9.16%, respectively.

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