October 25, 2012 / 7:30 AM / 5 years ago

UPDATE 1-Logitech braces for another fall in sales

* Q2 sales down 7 percent to $548 mln

* Expects H2 sales and operating income to fall

* Suffers from dominance of tablets and smartphones

* Shares fall 9 pct

ZURICH, Oct 25 (Reuters) - Computer mouse-maker Logitech expects lower sales and operating income for the rest of the year as market weakness offsets any benefits of new product launches.

The firm, the biggest maker of computer mice as well as gadgets such as web cams, said on Thursday sales fell 7 percent to $548 million in the second quarter of its 2013 financial year because of the poor PC market and a slowdown in emerging markets.

“We are now planning for continued strong headwinds in all of our PC-related categories for the remainder of the fiscal year,” said Chief Executive and Chairman Guerrino De Luca. “We expect this weakness to more than offset the positive impact of our new product launches.”

Logitech, founded in a Swiss farmhouse in 1981, saw a spectacular rise in the 1980s by bringing to market the first modern computer mouse, and thereafter introduced a successful line up of PC-accessories such as keyboards, cameras and speakers.

But in recent years it has struggled to adapt to a market increasingly dominated by tablets and smartphones such as Apple’s iPad, which do not rely on mice for operation and have many accessories such as cameras built in.

Logitech said PC-related sales still make up two-thirds of the group’s total turnover.

After a dismal financial year 2011/12 - including profit warnings and a parting of ways with top-management - the company promised a range of new products, as it sought to turn the tide.

But Logitech now expects sales and operating income for the second part of its 2013 financial year to be below what it recorded during the later half of the previous year.

Logitech shares were down 8.98 percent at 0723 GMT

“While the full potential of the new products will only show in the current Christmas quarter, the outlook provided is weak,” Vontobel analyst Michael Foeth said in a note.

“Logitech expects 2H13 revs and EBIT below last year’s level, which implies more than a 35 percent cut to our and consensus operating profit,” he added.

Logitech said net profit for the second quarter rose to $55 million from $17 million a year earlier, thanks in part to a net tax benefit of $32 million.

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