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Plantronics Q3 Sales Jump, Net Nearly Doubles

1/15/2004 09:37:00 AM Eastern

Santa Cruz, Calif. — Increased demand for cellular phone and wireless office headsets pushed up Plantronics’ fiscal third quarter domestic and international revenue by 24 percent, hitting $107.6 million, compared with $86.8 million in the year-ago period.

Net income for the three months, ending Dec. 31, nearly doubled, reaching $17.6 million, up from $9.2 million in the same quarter in 2002.

Plantronics boosted its operating margin in the third quarter, to 22.1 percent, compared with 14.5 percent in the same three months a year earlier.

Plantronics reported revenue of $29.5 million for mobile headsets in the third quarter, up from $16.1 million year on year, and up from $18.4 million in the fiscal second quarter.

Within the cellular headset products group, both corded and Bluetooth-based headsets had 'sharp' sales increases in the three months, said the company.

The company continues to 'see a good opportunity for Plantronics-brand Bluetooth headsets,' for which it earns higher margins than for the same products for OEM customers. However, during the current fiscal year, the company believes revenue of Bluetooth headsets for OEM customers will approach $15 million, a figure not considered significant in its likely customer mix.

'While this product category [cellular headsets] has historically been strong in the December quarter, due to seasonality, we believe that additional factors caused demand for our products to be unusually high last quarter,' said Ken Kannappan, Plantronics president/CEO.

'In particular, we believe our market share may have been unusually strong during the December quarter and that this position is unlikely to be sustainable.

'Other favorable impacts on demand in the December quarter included the impact of the hands-free legislation in the United Kingdom and a small effect from wireless number portability in the United States. For these reasons, we currently anticipate that revenues of mobile products are likely to be lower in the fourth quarter than they were in the third quarter,' said Kannappan.

Sales for the nine months climbed to $295.5 million, up from $249.4 million in the same period in 2002.

Net income reached $41.3 million for the period, compared with $30.9 million year over year. Gross margin for the nine months hit 19.3 percent, compared with 16 percent in the first nine months a year earlier.

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