Logitech International SA (USA) (NASDAQ: LOGI) shares plummeted 18.86% since
Friday after the company announced that its profits would be much lower than
previously expected. On Wednesday, in an ad-hoc media release, the company
announced that it is lowering its FY 2011, ending March 31, 2011 guidance. The
company now guides for $2.35-2.37 billion of FY 2011 sales, down from the
previous range of $2.4-2.42 billion & the consensus estimate of $2.41 billion.
While the old guidance implied around 11-15% LfL growth for the Jan-Mar quarter,
the new guidance implies 1-5% LfL growth. The company also reduced its FY 2011
EBIT guidance by around 17% to $140-150 million from the previous guidance of
$170-180 million. Hence there is around 19% downside to current FY 2011
consensus EBIT of $181 million. According to Logitech the guidance revision is
primarily due to weakness in the EMEA retail sales region. The company
experienced lower-than-expected demand for its retail products (mice, keyboards,
PC speakers, webcams, gaming peripherals and universal remotes) in EMEA from
both distribution partners and consumers. The implied guidance for 1Q11 is $545
million in revenue, $6 million in EBIT and $0.03 in EPS versus prior forecast of
$595 million in revenue, $36 million and $0.16 in EPS. The company is scheduled
to report earnings at the end of the month, on April 28, 2011. Shares of the
maker of peripheral computer devices craters went down by 18.86% to $14.71 after
the company lowered FY 2011 guidance to a midpoint of $2.36 billion from
previous guidance of $2.41 billion, with EBIT of $145 million from previous
guidance of $175 million. Logitech International S.A. (Logitech) is a provider
of personal peripherals for computers and other digital platforms. The Company
develops and markets products in personal computer (PC) navigation, Internet
communications, digital music, home-entertainment control, gaming and wireless
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