Earnings Briefs


Logitech Q3 Sales Increase 16%, Oper. Income Soars 29%

Fremont, Calif. — Fueled by sales of cordless desktop products, computer mouse maker Logitech recorded what it called 'the best quarterly financial performance in the company’s history,' reporting a 16 percent increase in sales for its fiscal third quarter, hitting $409.6 million, up from $351.8 million in the year-ago period. Operating income jumped 29 percent, to $65.3 million, in the third quarter, ended Dec. 31, compared with $50.8 million in the same three months in 2002. Net income for the quarter reached $66.8 million, up from $40.4 million year-on-year. Excluding a one-time tax break of $13.4 million, net income was $53.5 million, a jump of 32 percent over the same quarter last year. Gross margin climbed to 34.3 percent in the third quarter, compared with 31.5 percent in the second fiscal quarter. Highlights of Logitech’s third quarter included record cordless desktop products sales, an increase of 37 percent year-over year, and record growth for console gaming products, with sales up 174 percent quarter over quarter. Gaming product unit shipments totaled 2.5 million, nearly twice the unit shipments for any prior quarter. Nine-month sales reached $921.3 million, compared with $798.6 million in the same period a year ago. Net income climbed to $93.7 million for the nine months, up from $72.2 million year-on-year. The company expects sales will exceed $1.24 billion for the fiscal year, ended March 31, about a 13 percent increase over the previous 12 months. It is targeting a 15 percent increase in operating income for the 12 months, year-over-year.

Kodak Cuts Jobs As Q4 Net Slides; U.S. Camera Segment Sales Up 4%

Rochester, N.Y. — Accelerating its move into digital photography, away from traditional film, Eastman Kodak said it expects to slash its workforce by 20 percent and take up to $1.7 billion in charges over the next three years. The move to cut 12,000 to 15,000 jobs worldwide, is expected to save the company $800 million to $1 billion for the full year 2007. The cutbacks come at a time Kodak is reporting a consolidated net profit of $19 million for the fourth quarter, ended Dec. 31, down from $113 million in the year-ago period. Earnings from continuing operations, excluding the impact of cost reductions, were $199 million, compared with $191 million year-on-year. Consolidated fourth quarter sales, however, climbed 10 percent, to $3.8 billion, from $3.4 billion year-over-year. Photography segment sales in the United States in the fourth quarter increased 4 percent, to $1.14 billion, up from $1.1 billion year-on-year. Overall earnings from operations before charges for the segment decreased 19 percent, to $141 million, from $174 million in the same three months in 2002.

Plantronics Q3 Sales Jump 24%, Net Nearly Doubles

Santa Cruz, Calif. — Increased demand for cellular phone headsets and wireless office headsets pushed up fiscal third quarter domestic and international revenue at Plantronics 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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