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Logitech's (LOGI) Q2 Earnings Beat Estimates, Revenues Miss
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Logitech (LOGI - Free Report) reported mixed results in second-quarter fiscal 2023. The computer peripheral and software maker’s fiscal second-quarter non-GAAP earnings of 84 cents per share surpassed the Zacks Consensus Estimate of 81 cents but registered a year-over-year decline of 20%.
The dismal bottom line reflects lower revenues, along with industry-wide elevated component costs and unfavorable currency movements. However, reduced operating expenses partially offset the negative impacts of the aforementioned factors.
Logitech’s fiscal second-quarter revenues plunged 12% year over year to $1.15 billion and fell short of the consensus mark of $1.21 billion. The decline can be attributed to a strong year-over-year comparison, where revenues grew 3.9% in the second quarter of fiscal 2022.
In the past year, Logitech benefited from the elevated demand for its video collaboration, keyboards & combos and pointing device tools, mainly driven by the heightening of work-from-home and learn-from-home trends. Additionally, the demand for gaming products shot up due to the growing popularity of online video games and eSports amid the stay-at-home scenario. However, the demand softened due to the reopening of economic and business activities.
Logitech International S.A. Price, Consensus and EPS Surprise
Logitech registered a sales decline across the majority of key product categories except for Video Collaboration, which increased 2% year over year to $236.2 million.
Revenues from Pointing Devices dropped 2% year over year to $185.2 million, while Gaming revenues plunged 10% year over year to $297.7 million. Keyboards & Combos’ sales lost 15% to $200.9 million. Sales from PC Webcams were down 36% to $60.2 million, while Tablet and Other Accessories sales dipped 33% to $54.2 million.
The Audio & Wearables segment’s sales declined 25% year over year to $73.3 million. Mobile Speakers’ sales decreased 1% to $39.2 million. The Other segment’s sales plunged 61% year over year to $2.2 million.
Margins & Operating Metrics
Non-GAAP gross profit decreased 19.1% to $443.4 million from the year-ago quarter’s $548.1 million. The non-GAAP gross margin contracted 340 basis points from the prior-year quarter to 38.6%. The year-over-year decline was mainly due to increased component costs, higher logistics expenses and unfavorable currency movements.
Non-GAAP operating expenses declined 14.8% to $286.9 million. As a percentage of revenues, non-GAAP operating expenses shot down to 25% from the year-earlier quarter’s figure of 25.8%.
Non-GAAP operating income plummeted 26% to $156.5 million from $211.5 million reported in the year-ago quarter. The operating margin declined to 13.6% from 16.2% in the year-ago quarter. The decline in profits mainly reflects reduced revenues and gross margins, partially offset by lower operating expenses.
Liquidity and Shareholder Return
As of Sep 30, 2022, LOGI’s cash and cash equivalents were $868.5 million, down from $1.1 billion recorded in the previous quarter. Additionally, the company used $73 million in cash for operational activities in the second quarter.
In the second quarter of fiscal 2023, the company repurchased shares worth $117 million and paid dividends worth $159 million.
Fiscal 2023 Guidance
Considering the current macroeconomic challenges, LOGI kept its fiscal 2023 guidance unchanged.
Logitech expects sales to decline between 4% and 8% in constant currency, while non-GAAP operating income is anticipated in the range of $650-$750 million.
Zacks Rank & Stocks to Consider
Logitech currently carries a Zacks Rank #5 (Strong Sell). Shares of the company have declined 45.9% in the past year.
The Zacks Consensus Estimate for Zscaler's first-quarter fiscal 2023 earnings has been revised 7 cents north to 26 cents per share over the past 60 days. For fiscal 2023, earnings estimates have moved a penny north to $1.18 per share in the past 30 days.
Zscaler’s earnings beat the Zacks Consensus Estimate in all of the preceding four quarters, the average surprise being 28.6%. Shares of the company have declined 52.9% in the past year.
The Zacks Consensus Estimate for Digi’s fourth-quarter fiscal 2022 earnings has increased by 2 cents to 42 cents per share over the past 60 days. For fiscal 2022, earnings estimates have moved 3.2% up to $1.61 per share in the past 30 days.
DGII's earnings beat the Zacks Consensus Estimate in all of the preceding four quarters, the average surprise being 28.6%. Shares of the company have increased 80.9% in the past year.
The Zacks Consensus Estimate for Baidu's third-quarter 2022 earnings has been revised 46 cents southward to $2.51 per share over the past 60 days. For 2022, earnings estimates have moved 16.2% north to $9.16 per share in the past 60 days.
Baidu's earnings beat the Zacks Consensus Estimate in all of the preceding four quarters, the average surprise being 58.1%. Shares of BIDU have slumped 52.8% in the past year.
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Logitech's (LOGI) Q2 Earnings Beat Estimates, Revenues Miss
Logitech (LOGI - Free Report) reported mixed results in second-quarter fiscal 2023. The computer peripheral and software maker’s fiscal second-quarter non-GAAP earnings of 84 cents per share surpassed the Zacks Consensus Estimate of 81 cents but registered a year-over-year decline of 20%.
The dismal bottom line reflects lower revenues, along with industry-wide elevated component costs and unfavorable currency movements. However, reduced operating expenses partially offset the negative impacts of the aforementioned factors.
Logitech’s fiscal second-quarter revenues plunged 12% year over year to $1.15 billion and fell short of the consensus mark of $1.21 billion. The decline can be attributed to a strong year-over-year comparison, where revenues grew 3.9% in the second quarter of fiscal 2022.
In the past year, Logitech benefited from the elevated demand for its video collaboration, keyboards & combos and pointing device tools, mainly driven by the heightening of work-from-home and learn-from-home trends. Additionally, the demand for gaming products shot up due to the growing popularity of online video games and eSports amid the stay-at-home scenario. However, the demand softened due to the reopening of economic and business activities.
Logitech International S.A. Price, Consensus and EPS Surprise
Logitech International S.A. price-consensus-eps-surprise-chart | Logitech International S.A. Quote
Segment Details
Logitech registered a sales decline across the majority of key product categories except for Video Collaboration, which increased 2% year over year to $236.2 million.
Revenues from Pointing Devices dropped 2% year over year to $185.2 million, while Gaming revenues plunged 10% year over year to $297.7 million. Keyboards & Combos’ sales lost 15% to $200.9 million. Sales from PC Webcams were down 36% to $60.2 million, while Tablet and Other Accessories sales dipped 33% to $54.2 million.
The Audio & Wearables segment’s sales declined 25% year over year to $73.3 million. Mobile Speakers’ sales decreased 1% to $39.2 million. The Other segment’s sales plunged 61% year over year to $2.2 million.
Margins & Operating Metrics
Non-GAAP gross profit decreased 19.1% to $443.4 million from the year-ago quarter’s $548.1 million. The non-GAAP gross margin contracted 340 basis points from the prior-year quarter to 38.6%. The year-over-year decline was mainly due to increased component costs, higher logistics expenses and unfavorable currency movements.
Non-GAAP operating expenses declined 14.8% to $286.9 million. As a percentage of revenues, non-GAAP operating expenses shot down to 25% from the year-earlier quarter’s figure of 25.8%.
Non-GAAP operating income plummeted 26% to $156.5 million from $211.5 million reported in the year-ago quarter. The operating margin declined to 13.6% from 16.2% in the year-ago quarter. The decline in profits mainly reflects reduced revenues and gross margins, partially offset by lower operating expenses.
Liquidity and Shareholder Return
As of Sep 30, 2022, LOGI’s cash and cash equivalents were $868.5 million, down from $1.1 billion recorded in the previous quarter. Additionally, the company used $73 million in cash for operational activities in the second quarter.
In the second quarter of fiscal 2023, the company repurchased shares worth $117 million and paid dividends worth $159 million.
Fiscal 2023 Guidance
Considering the current macroeconomic challenges, LOGI kept its fiscal 2023 guidance unchanged.
Logitech expects sales to decline between 4% and 8% in constant currency, while non-GAAP operating income is anticipated in the range of $650-$750 million.
Zacks Rank & Stocks to Consider
Logitech currently carries a Zacks Rank #5 (Strong Sell). Shares of the company have declined 45.9% in the past year.
Some better-ranked stocks from the broader Computer and Technology sector are Zscaler (ZS - Free Report) , Digi International (DGII - Free Report) and Baidu (BIDU - Free Report) . While Zscaler and Digi International sport a Zacks Rank #1 (Strong Buy), Baidu carries a Zacks Rank #2 (Buy) at present. You can see the complete list of today's Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Zscaler's first-quarter fiscal 2023 earnings has been revised 7 cents north to 26 cents per share over the past 60 days. For fiscal 2023, earnings estimates have moved a penny north to $1.18 per share in the past 30 days.
Zscaler’s earnings beat the Zacks Consensus Estimate in all of the preceding four quarters, the average surprise being 28.6%. Shares of the company have declined 52.9% in the past year.
The Zacks Consensus Estimate for Digi’s fourth-quarter fiscal 2022 earnings has increased by 2 cents to 42 cents per share over the past 60 days. For fiscal 2022, earnings estimates have moved 3.2% up to $1.61 per share in the past 30 days.
DGII's earnings beat the Zacks Consensus Estimate in all of the preceding four quarters, the average surprise being 28.6%. Shares of the company have increased 80.9% in the past year.
The Zacks Consensus Estimate for Baidu's third-quarter 2022 earnings has been revised 46 cents southward to $2.51 per share over the past 60 days. For 2022, earnings estimates have moved 16.2% north to $9.16 per share in the past 60 days.
Baidu's earnings beat the Zacks Consensus Estimate in all of the preceding four quarters, the average surprise being 58.1%. Shares of BIDU have slumped 52.8% in the past year.