Back in September, Logitech (NASDAQ: LOGI ) cut its full-year guidance for the
third time. The new estimate came to $2.4 billion, which was $100 million lower
than the prior forecast. Operating income would be about $90 million, compared
to the previous forecast of $143 million. But Logitech CEO Guerrino De Luca said
this would be the final change, and he even apologized to investors. However, it
was not enough to bolster confidence LOGI shares hit a low of $7.72 after
sitting around almost $20 in March. Yet by setting the bar fairly low, Logitech
actually was able to show some relative strength in the fiscal second quarter.
The company last week reported a 1% increase in revenues to $589 million and
earnings of $17 million, down from $41 million. It was enough to generate
optimism with investors, with Logitech stock spiking 17.3% on the news. On
Monday, the stock was trading near the $10 mark. So might things be getting
better? More importantly, is LOGI stock worth buying? To see, let's take a
look at the pros and cons: Pros Leader in peripherals. Founded in 1981, Logitech
was one of the first companies to realize the huge opportunity of the PC
revolution. Logitech originally developed staples like traditional keyboards and
mice, but it has since expanded into other categories like gaming, wireless
devices (including keyboards and mice) and home entertainment. China story. This
has been a bright spot for Logitech. The company has made substantial
investments in the country, and on the earnings conference call, De Luca
indicated Chinese growth should remain fairly strong in the coming quarters.
LifeSize. This product line provides for HD video used in conference calls and
meetings. It compares favorably to more expensive offerings, such as from Cisco
(NASDAQ: CSCO ). In the latest quarter, the LifeSize segment posted a 19% growth
rate.
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