Computer interface devices manufacturer Logitech International S.A. (LOGI) reported late Wednesday a profit for the first quarter of fiscal 2015 that surged from last year, reflecting improved margins and sales growth.
Both adjusted earnings per share and quarterly sales topped analysts' expectations. The company reaffirmed its sales guidance for the full-year 2015, while raising annual operating profit outlook.
"We have started the new fiscal year with a strong Q1 performance, delivering sales growth, year-over-year improvement in profitability and improved cash generation. Q1 sales in our Growth category - which includes PC Gaming, Tablet and Other Accessories, and Mobile Speakers - were up 17 percent, with Mobile Speakers sales more than doubling over last year," President and CEO Bracken Darrell said in a statement.
The Apples, Switzerland-based company reported net income of $22.03 million or $0.13 per share for the first quarter, sharply higher than $1.04 million or $0.01 per share in the prior-year quarter.
Excluding items, adjusted net income for the quarter was $38.25 million or $0.23 per share, compared to $10.67 million or $0.07 per share in the year-ago quarter.
On average, five analysts polled by Thomson Reuters expected the company to report earnings of $0.08 per share for the quarter. Analysts' estimates typically exclude special items.
Net sales for the quarter increased 1 percent to $483.72 million from $477.92 million in the same quarter last year, and topped seven Wall Street analysts' consensus estimate of $476.95 million.
Sales through retail channel increased 3 percent to $425.42 million from the year-ago quarter.
Meanwhile, sales to OEMs declined 6 percent to $32.55 million from the prior-year quarter, and video conferencing or Lifesize sales, decreased 15 percent to $25.76 million from last year.
Among the product families sold through retail channel, only four of the eight posted sales growth, with only PC gaming, mobile Speakers, PC keyboards & desktops and video product sales improving. The best performing category in terms of contribution continued to be pointing devices, with PC keyboards & desktops being a close second.
Operating margin for the quarter expanded 530 basis points to 5.3 percent from last year, as gross profit margin improved 290 basis points and total operating expenses, as a percentage of sales, declining 240 basis points, with it being fifth consecutive quarter of year-over-year reductions.
Looking ahead to fiscal 2015, Logitech continues to expect sales of $2.16 billion. Street is currently looking for full-year 2015 sales of $2.17 billion.
Adjusted operating income for the year is now expected in a range of $145 million to $170 million, up from the previously projected about $145 million, reflecting the expected strength of our gross margin.
"As planned, our cost reduction actions continue to drive increased operating leverage. As we proceed through Fiscal Year 2015, we will continue to focus both on accelerating sales growth and on achieving our improved outlook for profitability," Darrell noted.
LOGI closed Wednesday's regular trading session at $13.33, unchanged on a volume of 0.57 million shares.
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