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Logitech (LOGI) Q4 Earnings & Revenues Top Estimates, Up Y/Y

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Logitech International (LOGI - Free Report) reported fourth-quarter fiscal 2020 results, wherein both bottom and top lines surpassed estimates.

Non-GAAP earnings came in at 42 cents per share, surpassing the Zacks Consensus Estimate by 16.7%. The bottom line also improved from the year-ago quarter’s 38 cents.

Net sales of $709 million surpassed the consensus mark of $661 million and rose 14% year over year in dollars and 15% at constant currency.

The year-over-year increase stemmed from strong growth across all business segments. Bracken Darrell, president and CEO, Logitech, noted, "Video conferencing, working remotely, creating and streaming content, and gaming are long-term secular trends driving our business. The pandemic hasn’t changed these trends: it has accelerated them."

Logitech International SA Price, Consensus and EPS Surprise

Logitech International SA Price, Consensus and EPS Surprise

Logitech International SA price-consensus-eps-surprise-chart | Logitech International SA Quote

Segmental Details

Logitech’s Gaming segment’s sales grew 8% year over year to $148.9 million. Video Collaboration sales witnessed a 60% rally to $110.7 million.

However, Mobile Speakers’ sales fell 7% to $21.2 million.

Audio & Wearables segment sales remained flat year over year at $65 million. Smart Home segment sales fell 28% year over year to $8.3 million.

Logitech’s Creativity and Productivity business comprises four sub-business lines — Keyboards and Combos, Pointing Devices, PC Webcams, and Tablet and Other Accessories. Revenues from Pointing Devices, and Keyboards and Combos grew 3% and 12% year over year, respectively. Moreover, revenues from PC Webcams, and Tablet and Other Accessories surged 32% and 36%, respectively.

The Other segment declined 59% to $94 million in the quarter.

Margins & Operating Metrics

Non-GAAP gross profit rose 19% year over year to $282.5 million. Non-GAAP gross margin expanded 180 basis points (bps) from the year-ago quarter to 39.8%.

Non-GAAP operating expenses grew 17.6% to $203.5 million.

Non-GAAP operating income climbed 23% to $79 million. Operating margin of 11.1% expanded 80 bps.

Liquidity

As of Mar 31, 2020, Logitech’s cash and cash equivalents were $715.6 million compared with $656.05 million in the previous quarter.

Additionally, the company generated operating cash flow of $100.8 million in the fiscal fourth quarter compared with $181.12 million in the prior quarter.

Fiscal 2020 Highlights

Revenues for the year grew 7% in dollars and 9% at constant currency to $2.98 billion. Non-GAAP earnings of $2.15 grew 7% year over year.

Cash flow from operations was $425 million, up from $305 million a year ago.

Guidance

Logitech provided a view for fiscal 2021. The company expects non-GAAP operating income of $380-$400 million.

Revenue growth is anticipated in the mid-single-digit range at constant currency.

Zacks Rank and Other Stocks to Consider

Logitech currently sports a Zacks Rank #1 (Strong Buy).

A few other similar-ranked stocks in the broader technology sector are Advanced Semiconductor Engineering Inc (ASX - Free Report) , NeoPhotonics Corporation (NPTN - Free Report) and Twilio Inc (TWLO - Free Report) . You can see the complete list of today’s Zacks #1 Rank stocks here.

Long-term earnings growth rate for Advanced Semiconductor, NeoPhotonics and Twilio is currently pegged at 26.63%, 15% and 26.61%, respectively.

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