Logitech Swings To $29.6 million 1Q Net Loss; CEO Quindlen Steps Down

Date : 07/27/2011 @ 10:56PM
Source : Dow Jones News
Stock : Logitech International S.A. - Registered Shares (MM) (LOGI)
Quote : 36.92  0.0 (0.00%) @ 8:44AM

Logitech Swings To $29.6 million 1Q Net Loss; CEO Quindlen Steps Down

Logitech International S.A. - Registered Shares (MM) (NASDAQ:LOGI)
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Computer peripherals maker Logitech International SA (LOGN.VX) fell short of expectations Thursday by posting a first quarter net loss of $29.6 million and lowered its sales outlook for the full fiscal year to approximately $2.5 billion from $2.6 billion.

The company also announced that Gerald P. Quindlen has stepped down as president and chief executive. He has been replaced on an acting basis by chairman of the company Guerrino De Luca.

"My priorities will be to pursue our many opportunities with a strong sense of urgency and to renew the confidence in Logitech among all stakeholders," said De Luca in a statement.

The Swiss company announced a net loss for the quarter ended June 30 of $$29.6 million compared with a net profit of $19.5 million a year earlier. The result was below expectations of a $4.2 million loss.

Sales rose marginally to $480 million from $479 million, below expectations of $489 million.

Operating loss was $45 million, compared to an operating income of $12 million in the same quarter a year ago. Included in the operating loss was a $34 million charge to cost of goods sold due to a planned price reduction on Logitech Revue with Google TV.

The company said the result reflects sustained weakness in its EMEA sales region. There was also minimal sales growth in its Americas region, primarily due to very weak sales in the Digital Home category. It added that the quarterly performance was hit by the "significant impact" of the decision to reduce the price of Logitech Revue from $249 to $99 during the second quarter of last year. The action was taken with the goal of accelerating adoption of the Google TV platform by removing price as a barrier to broad consumer acceptance.

The company, the world's largest maker of computer mice, has been battling the rise of tablet computers which do not need mice or keyboards, another of Logitech's key products.

Logitech has also been facing a slowdown in consumer electronics demand across Europe that has already seen profit warnings from navigational device maker Tom Tom NV (TOM2.AE) and Philips Electronics NV (PHIA.AE) and has hammered sales at electronics retailers.

Retailers Kesa Electricals PLC (KESA.LN), Home Retail Group PLC (HOME.LN) and Dixons Retail PLC (DXNS.LN) have all fallen foul of a steep slump in consumer electronic sales.

-By John Revill, Dow Jones Newswires; +41 43 443 8042 ; john.revill@dowjones.com

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