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Logitech (LOGI) Q1 Earnings & Revenues Top Estimates, Up Y/Y

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Logitech International (LOGI - Free Report) reported solid first-quarter fiscal 2020 results, wherein both the top line and the bottom line surpassed estimates and improved year over year.

Non-GAAP earnings came in at 39 cents per share, surpassing the Zacks Consensus Estimate of 35 cents. The bottom line also improved from the year-ago quarter figure of 34 cents.

Net sales of $644 million beat the consensus estimate of $638 million, and rose 6% year over year in dollars and 9% in constant currency. Revenue growth stemmed from consistent strength in Video Collaboration and Mobile Speakers, and a solid product portfolio.

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

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

Logitech International S.A. price-consensus-eps-surprise-chart | Logitech International S.A. Quote

Segmental Details

Logitech’s Gaming segment’s sales slipped 1% year over year to $134.5 million. Video Collaboration jumped 25% to $73.4 million.

Mobile Speakers business’ sales surged 47% to $50.4 million and Audio & Wearables segment witnessed 12% year-over-year growth.

Moreover, Smart Home segment witnessed growth after putting up a disappointing show in the previous quarter. Sales grew 9% to $9.9 million.

Logitech’s Creativity and Productivity business comprises four sub-business lines — Keyboards and Combos, Pointing Devices, PC Webcams, and Tablet and Other Accessories. Keyboards & Combos revenues increased slightly (0.4%) year over year, and Tablet & Other Accessories jumped 18%. However, Pointing Devices and PC Webcams dived 5% each.

Notably, the Other segment, products of which the company is currently in the process of transitioning out of, registered a whopping 427% surge in the reported quarter.

Margins & Operating Metrics

Non-GAAP gross profit rose 7% year over year to $243.4 million. Non-GAAP gross margin increased 40 basis points (bps) to 37.8%.

Non-GAAP operating expenses jumped 5.7% to $176.4 million.

Non-GAAP operating income climbed 10.7% to $67 million. Operating margin of 10.4% expanded 50 bps from the year-ago quarter.

Liquidity

As of Jun 30, 2019, Logitech’s cash and cash equivalents were $597 million compared with $604.5 million in the previous quarter.

Additionally, the company generated operating cash flow of $36.5 million in the fiscal first quarter compared with $31.7 million in the prior quarter.

Guidance

Logitech reaffirmed view for fiscal 2020. The company expects the non-GAAP operating income to be $375-$385 million.

Revenue growth is anticipated within mid-high single digits in constant currency.

Zacks Rank and Key Picks

Logitech currently has a Zacks Rank #3 (Hold).

A few top-ranked stocks in the broader Computer and Technology sector are Keysight Technologies Inc. (KEYS - Free Report) , Nikon Corp. (NINOY - Free Report) , and Alibaba Group Holding Limited (BABA - Free Report) , 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 rate for Keysight, Nikon and Alibaba is projected to be 10%, 1% and 26.83%, respectively.

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