Logitech Posts 35% Rise In Quarterly Profits

PC and video game peripheral manufacturer Logitech announced a 35 percent rise in profits for the fiscal quarter, news which helped bolster its shares by nine percent. Profit exceeded expectations as well, climbing to $30.1 million, up from $22.4 million during the same period in 2005. Logitech, which makes PSP accessories, steering wheels, wireless controllers and mice for video game-related use, and also noted that its retail sales climbed an impressive 20 percent for the quarter, noting growth in all regions. Game peripherals seem to be a minority of the company's market in recent quarters - however, over total sales, remote controls (including an Xbox 360-specific remote) did particularly well, with a growth of 122 percent, while other areas such as video products (56 percent) and audio products (23 percent) also saw considerable gains. Sales for cordless products grew 18 percent as well, as did OEM sales, which climbed a moderate 4 percent. The company also noted that its operating profit, excluding stock-based compensation, rose to $28.9 million, up 15 percent for the quarter. Net sales saw a similar increase, rising 17.5 percent to $393.3 million, up from $335 million last year's quarter. Analysts had previously predicted net sales of just $385.6 million for the quarter. Looking forward, the peripheral manufacturer expects an year-on-year increase of 15 percent in sales and operating income for the current fiscal year, ending on March 31, 2007. "With our solid performance in Q1, Logitech is on track to achieve our financial goals for FY 2007," said CEO Guerrino De Luca. "As we anticipated, gross margin for the quarter was below our long-term target range of 32-34 per cent; we expect to see substantial sequential and year-over-year improvement in gross margin in Q2 as we roll out a range of exciting new products."