LifeSize videoconferencing business drags down Logitech's earnings
Logitech (Nasdaq: LOGI) is taking a $211 million accounting charge against its fiscal year 2013 third quarter earnings due to a slowdown in its videoconferencing business, particularly the LifeSize unit, the company said in a statement.
Better known for its computer peripherals, Logitech also has a $440 million videoconferencing business that includes LifeSize, Sightspeed, Paradial and Mirial.
"The enterprise video conferencing industry has experienced a slowdown in recent quarters and consequently, through this period, the video conferencing reporting unit has not sustained the growth Logitech originally anticipated. Logitech does not expect this accounting write down to affect its business or financial performance beyond the recently completed third quarter," Logitech said.
For its 2013 third quarter, Logitech reported a disappointing $615 million in sales, a 14 percent year-over-year decline, and a net loss of $195 million compared to a net income of $55 million in the fiscal year 2012 third quarter. Its operating loss of $180 million was due primarily to the $211 million accounting charge.
In addition to the accounting charge, Logitech blamed its disappointing results on a slowdown in the global PC market. The one bright spot was strong demand for its tablet keyboard covers.
"These results are unacceptable and we are taking decisive action as an outcome of my strategic review… We plan to expand our presence in the growing tablet accessories category with the launch of a number of exciting new products later this quarter," said Bracken Darrell, Logitech's president and CEO.
Logitech also plans to sell off its Harmony line of remote controls and digital video security business and discontinue its speaker docks and console gaming peripherals by the end of this year, added Darrell, who only recently assumed the CEO post.
Logitech's stock price dropped 6 percent on Wednesday in response to the poor financial results.