Results for the new fiscal year at Logitech (News - Alert), which concluded its first quarter in June, weren't pleasant, and the recently announced numbers make it clear just how unpleasant the whole thing was for the company. Logitech's net loss for the April-June quarter was up to 32 cents per share, or right around $52 million for the quarter. That's up nearly double from a year ago, when the same quarter brought it a $29.6 million loss.
Logitech, based in both Switzerland and California, had a lot of problems with world events like a weakening overall global economy and an ongoing disaster in the Euro market that's leaving the currency soft. But perhaps more than that is a growing paradigm shift away from laptops and desktops—though its still very much in play--as more users go strictly to a mobile posture with tablets and smartphones. These in turn don't depend so much on external speakers, keyboards, mice and webcams, which are a large chunk of Logitech's business.
Logitech, to its credit, is actively trying to turn its fortunes around. They've already launched a set of profit warnings to keep the investors aware, and they replaced its chief executive. This is a good start, made even better by its follow-up move to cut costs by $80 million annually. Sadly, however, this means job cuts, the last thing anyone wants to see, especially in a brutal job market like the one in which we're currently neck-deep.
Guerrino De Luca, Logitech's current chairman and CEO, made a statement in which he announced that Logitech's plans for a turnaround were well underway, and were proceeding well besides. Logitech also has plans to shake up its product line a bit, focusing on "the digital home" as well as a variety of products specifically geared toward current trends in navigation, music and tablets.
Indeed, much of Logitech's line can make tablet use even better; while keyboards aren't part of the tablet experience, they do improve it substantially, especially for those who do a lot of word processing. Tablets often come with their own speakers, but adding an external set augments the sound coming out of that tablet. The advances in the "digital home" are becoming more prevalent with each passing day, as more and more of a home's functions can be controlled from a smartphone, even when nowhere near the home in question. If Logitech can keep up with these advances, they may well have some impressive offerings to bring out, and help get the company back toward profitability.
While there will be a bit of a wait between Logitech's announced plans and its ultimate result, it's safe to say that Logitech is doing what it can in the face of difficult circumstances, many of which it had no real control over in the first place. But rather than bemoan its situation, the company worked to turn it around. Even if it doesn't come off the way it likes, it's still both notable and laudable that the company gave it its best.
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Edited by Brooke Neuman