Logitech 4Q Net Profit Jumps 58%

ZURICH--Logitech International SA (LOGN.EB) Thursday said fiscal fourth-quarter earnings jumped 58% on strong sales of gaming and tablet accessories and mobile speakers.

Logitech, based in Newark, Calif., and Lausanne, Switzerland, reported a net profit of $16.7 million for the three months ended March 31, up from $10.6 million a year earlier.

Net sales slipped 4.7% to $467.2 million from $490.3 million, but beat analysts" forecasts for $463.7 million. Sales rose a better-than-expected 1% in constant currency, the maker of computer mice, keyboards and wireless speakers said.

Logitech, like other companies that report in U.S. dollars but sell around the world, was hit by the strength of the greenback, particularly against the euro. The single currency has given up around 12% versus the dollar this year, reducing Logitech's sales in the eurozone where it generates around a quarter of its revenue.

Most of Logitech's manufacturing costs are in dollars or currencies linked to the dollar, which means the company has a mismatch between its costs and revenues.

"We closed Fiscal Year 2015 with a better-than-expected performance and good momentum in spite of currency headwinds," said Logitech President and Chief Executive Bracken Darrell. Sales in its growth category, which includes gaming, tablet and other accessories, mobile speakers and video, grew 28% in constant currency over the full year, and 45% in the fourth quarter.

The company exceeded fiscal year 2015 expectations, posting the best earnings in seven years, it said.

Logitech has successfully rebooted its business to focus on detachable keyboards for tablet computers, like Apple Inc.'s iPad and Samsung Electronic Co.'s Galaxy line, as well as wireless speakers that play music from mobile phones and other devices. The peripherals maker has also launched specialty products, such as keyboards aimed at online gamers.

The company is also trying to bring out new products more quickly in response to shorter product lifecycles, a way to maximize their selling time. This year, the company aims to launch around 25 devices.

Mr. Darrell said Logitech expected to incur restructuring charges of approximately $15 million to $20 million over the coming year. The company will focus on growing its retail business, exit OEM operations and target cost-cutting in production and infrastructure.

Write to John Revill at [e-mail]

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