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Logitech Post Record Q3 Sales, Earnings

Fremont, Calif. — Logitech International reported record double-digit gains in its fiscal third quarter sales and earnings.

For the quarter ended Dec. 31 sales were $744 million, up 13 percent from $659 million in the same quarter last year. Operating income was $116 million, up 17 percent from $100 million for the same quarter a year ago. Net income was $134 million up from $94 million one year ago.

Gross margin reached an all-time high for the company at 36.9 percent, compared with 36.2 percent in the previous year’s third quarter.

Logitech’s retail sales for Q3 grew by 9 percent year-over-year, increasing by 9 percent in the Americas. However, the company reported growth in the Americas was restrained by continued weakness in the webcam category.

Retail sales in all regions were driven by strong demand for Harmony remote controls, keyboards and mice. Sales of Harmony remote controls increased by 72 percent, with strong growth in all regions. Keyboard sales increased by 32 percent and mice sales increased by 22 percent. OEM sales grew by 54 percent, driven by strong demand for microphones for console singing games.

“We are very pleased with our Q3 performance,” said Gerald. P. Quindlen, Logitech president/CEO. “We delivered record sales and our best gross margin ever, despite a highly promotional retail environment, and we continued to improve the effectiveness of our working capital management as we finished Q3 with half a billion dollars in cash. The strong momentum in core categories such as keyboards and mice exemplifies how leadership in innovation stimulates continued demand and supports improved margins. And the robust sales of Harmony remotes underscore the promise of our increasing attention on the digital home. The progress we have made in realigning our operating expense growth and gross profit growth positions us to exceed our fiscal year 2008 goal for operating income growth.”