Switzerland-based computer peripherals company Logitech has reported a 70% decline in net income to $40.49m for the third quarter 2009, compared to net income of $133.57m in the year-ago quarter, on revenue down 16% at $627.46m.
Operating income for the quarter fell 63% to $43m, while diluted EPS fell 69% to $0.22. The company said retail sales declined 16%, with a 21% decline in the Americas, a 19% decline in EMEA, and an 8% increase in Asia. OEM sales also declined by 11% to $81.92m.
Audio products sales grew 3% to $152.43m, while pointing devices sales fell 20% to $149.06m. Keyboards and desktop sales fell 28% to $106.29m, while video products sales grew 7% to $71.15m. Gaming products sales fell 31% to $38.11m, while remotes sales fell 41% to $28.49m.
For the nine-month period, the company reported a 17% decline in net income to $142.11m compared to $170.68m a year ago, on revenue up 2% at $1.8 billion.
Gerald P Quindlen, president and chief executive at Logitech, said: The deepening global recession had a significant impact on our operating performance as our customers continued to reduce inventory levels in the face of weaker consumer demand. Two factors primarily contributed to the decline in our gross margin from last year’s record high – the negative impact of a significantly stronger dollar and a retail environment that was highly promotional, particularly in the Americas. All indications point to an even weaker retail environment in the coming months. Consequently, our plans assume that in Q4 we will see year-over-year declines in sales, operating income before restructuring charges and gross margin that are similar to or worse than the year-over-year declines we experienced in Q3.
Earlier this month the company announced plans to reduce its salaried workforce globally by between 550 and 600 employees as part of a restructuring to reduce operating expenses. It expects the plan to generate annual cost savings of approximately $50m beginning in fiscal 2010. It also expects to incur a total charge of approximately $20m to $24m over the next 12 months, of which approximately $16m to $18m is expected to be incurred during the fourth quarter 2009.
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