Logitech International, a maker of digital products such as digital cameras, has announced that sales for its second fiscal quarter of 2004, ended Sept, 30, 2003, were U.S. $294 million, up 17 percent from $252 million in the same quarter last year. Operating income was $27.4 million, up from $25.7 million last year. Net income for the quarter was $21.2 million ($0.44 per share), up slightly from $21 million ($0.42 per share) in the second quarter of 2003. Gross margin rebounded in the second quarter to 31.5 percent, compared with 27.8 percent during this year's first fiscal quarter an improvement of 370 basis points.
The company said the second quarter of 2004 was its strongest-ever second quarter, with revenue and operating income exceeding its expectations. The strong Q2 revenue results were largely due to robust OEM sales, which were up by 45 percent over Q2 of the prior year, the company said. Retail sales of Logitech products also grew up 11 percent over the same quarter last year. The sequential improvement in gross margin was a significant factor for the higher-than-expected operating income.
"We're very pleased with our performance for the second quarter," said Guerrino De Luca, Logitech's president and CEO. "Our record sales, solid profitability and improved margins for the second quarter clearly indicate that our growth initiatives and product-cost improvements are working."
According to Mr. De Luca, the company’s OEM revenue was the highest ever, driven by sales to Sony of the EyeToy™ Camera and the USB Headset for the Sony® PlayStation®2, as well as by the appeal of the company’s products that enable PC producers to differentiate their systems.
"For key Logitech retail products -- such as cordless mice, gaming peripherals for consoles and PCs, PC speakers and headsets, and webcams -- we were able to deliver significant growth, and defend or gain market share in a vibrant and extremely competitive market," Mr. De Luca said.
Highlights of Logitech's second quarter include:
Record performance for Logitech's console-gaming peripherals, representing what the company says is its highest level of sales and unit shipments -- sales for these products more than tripled compared to the same quarter last year
Retail sales of Logitech-branded speakers more than doubled over the second quarter of last year
Retail sales of webcams increased by 36 percent over the second quarter of last year
Cash flow from operations was $31 million for the second quarter of 2004, up $20 million compared with the same quarter a year ago
Successful launch of the company's first-ever television advertising campaign, which includes print and Web advertising
Introduction of new retail products, including cordless mice, PC speakers, cordless headsets, and gaming peripherals for PCs and consoles
For the fiscal year 2004, ending March 31, 2004, the company reaffirmed its targets for 10-percent growth in revenue and 15-percent growth in operating income, over FY 2003.
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