Hot Tech stock to watch: Logitech International SA (NASDAQ: LOGI)

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Logitech International SA (NASDAQ: LOGI) stock rose over 3% on Jan 21st, 2020 (as of 12:18 pm GMT-5; Source: Google finance) after the company reported the adjusted revenue growth of 4.4 percent to $902.7 million in the third quarter of FY 20,6% increase in the non-GAAP operating income to $152 million, compared to $143 million in the same quarter a year ago. The company posted Q3 non-GAAP EPS of $0.84, compared to $0.79 in the same quarter a year ago. Cash flow from operations has increased to $181 million, compared to $176 million in the same period a year ago. The company’s non GAAP gross margin was down 50 basis points year over year and down 80 basis points sequentially to 37.6%, which was slightly better than expected as cost mitigation efforts and favorable product mix helped offset the incremental headwinds from List 4A China tariffs and continued unfavorable currency exchange rates. At the end of December 2019, the inventory down $35M to $307M, from Q3 last year, while the inventory turns were 7.4 times, which is an improvement versus 6.3 times in Q3 last year.

 

Further, the revenue growth is driven by a consistent performance from PC Peripherals, continued momentum in Video Collaboration, and a return to double-digit growth in Gaming. During the quarter, Pointing Device sales rose 5%, due to strong contributions from our recently introduced flagship cordless mouse MX Master 3 as well as record high sales in the slim, design-centric Pebble mouse and the ergonomic MX Vertical mouse

Geographically, In Q3, sales in the Americas region had declined 1% mainly due to declines in Mobile Speakers and Blue Microphones. Most of the other categories in the Americas achieved growth in the quarter. The sales in our EMEA region rose 16% and represented the fourth consecutive quarter of double-digit growth. PC Peripherals, Video Collaboration and Gaming sales had all increased in double digits in the quarter.  Q3 sales growth in the Asia Pacific region was 3%, which is consistent with prior quarter trends. The growth in PC Peripherals, Video Collaboration and Gaming were offset by declines in Tablets & Other Accessories and Audio & Wearables.

The company for fiscal year 2020 expects mid to high single-digit sales growth in constant currency and projected to be in the range of US$375 million to US$385 million in adjusted operating income.

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