Logitech Expected to Face Earnings Decline This Quarter

Logitech faces a challenging fiscal third quarter with expected EPS of $1.35, an 11.8% decline compared to last year. Continued weak demand for PCs and soft IT spending may further pressure revenues.

Date: 24-01-2025

AI Rating: 4

Overview of Logitech's Financial Expectations

Logitech International is facing a downward trend in its earnings for the upcoming third-quarter fiscal 2025 result. The reported estimate for non-GAAP earnings per share (EPS) stands at $1.35, reflecting an 11.8% decline year-over-year. This estimate remains unchanged over the past 90 days, indicating a lack of favorable revisions despite prior strong performance.

Earnings Performance and EPS Surprise

Historically, Logitech's earnings have surpassed estimates for four consecutive quarters with an average surprise of 32.5%. However, the consensus indicates that the momentum may not persist this time. With an Earnings ESP of 0.00% and a Zacks Rank of #2 (Buy), there is uncertainty regarding whether Logitech can meet or exceed expectations this quarter.

Revenue Digest

The Zacks Consensus Estimate for Logitech's third-quarter revenues points to a decrease of approximately 1.8%, landing at $1.23 billion compared to the previous year. This anticipated decline aligns with a broader trend of softening IT spending and lagging demand in the PC peripherals market. The report cites a modest 1% growth in PC shipments, underscoring the weak demand environment impacting Logitech's sales.

Segment Performance

Within its product segments, expectations of decreased revenues are also present. Key areas like Video Collaboration and Keyboards & Combos are projected to see year-over-year declines of approximately 5.2% and 1% respectively. Only the Tablet Accessories segment is forecasted to show positive revenue growth at 4.6%. The overall weakening economy, characterized by uncertainties and delayed IT spending initiatives, heavily influences these segment performances.

Market Sentiment

Overall, the financial data suggests a cautious outlook for Logitech leading up to its earnings report. With the anticipated EPS decline and decreasing revenue estimates, investor sentiment may be negatively impacted, making it critical to monitor these developments closely.

Stocks: LOGI