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What's in the Offing for Logitech (LOGI) This Earnings Season?

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Logitech International (LOGI - Free Report) is slated to report first-quarter fiscal 2025 results on Jul 22.

The Zacks Consensus Estimate for first-quarter fiscal 2025 revenues is pegged at $1.03 billion, which indicates an increase of 6.1% from the year-ago quarter. The consensus mark for non-GAAP earnings stands at 89 cents per share, which suggests a robust rise of 36.9% from the year-ago quarter’s earnings of 65 cents. Earnings estimates for the first quarter have remained unchanged in the past 60 days.

The company’s earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 49.3%.

Let’s see how things have shaped up before the upcoming announcement.

Factors to Consider

Logitech’s fiscal first-quarter results are likely to benefit from improving demand for personal computers (PCs), the main sales booster for its PC peripheral products. According to data compiled by the independent research firm, International Data Corporation, the worldwide traditional PC market returned to growth in the first quarter of 2024 following two years of decline. The growth momentum continued in the second quarter, with PC shipments increasing 3% year over year, depicting an acceleration from the first quarter growth of 1.5%.

The PC peripheral product manufacturer’s first-quarter results are also expected to gain from inventory normalization at its channel partners. Moreover, the beginning of product refreshes is anticipated to have aided the first-quarter performance as well. The majority of the global working population refreshed PCs and related peripheral products about two years ago in the wake of the pandemic-led work-from-home trend.

Our estimates for Logitech’s Video Collaboration and Keyboards & Combos first-quarter revenues are pegged at $145.9 million and $190.7 million, respectively. The estimated revenue figures for Video Collaboration and Keyboards & Combos suggest a year-over-year increase of 4.7% and 5.5%, respectively.

We expect revenues from the Tablet Accessories, Pointing Devices and Webcams business units to increase 6.3%, 5.1% and 2.6%, respectively, in the first quarter. Our first-quarter revenue estimates for the Tablet Accessories, Pointing Devices and Webcams business units are currently pegged at $74.3 million, $183.3 million and $77.1 million, respectively.

Our estimate suggests the company’s Gaming revenues will improve 5.7% year over year to $281.7 million in the to-be-reported quarter. Our estimate of $37.8 million for Headsets revenues implies an increase of 2.6%.

Additionally, Logitech’s profitability is likely to have continued improving in the first quarter, driven by its cost-saving initiative, which includes headcount reduction.

What Our Model Says

Our proven model does not conclusively predict an earnings beat for LOGI this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. However, that’s not the case here.

Though Logitech carries a Zacks Rank #3, it has an Earnings ESP of -4.71%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Stocks With the Favorable Combination

Per our model, PayPal (PYPL - Free Report) , Arista Networks (ANET - Free Report) and Corning (GLW - Free Report) have the right combination of elements to post an earnings beat in their upcoming releases.

PayPal sports a Zacks Rank #1 and has an Earnings ESP of +2.93%. The company is slated to report second-quarter 2024 results on Jul 30. Its earnings beat the Zacks Consensus Estimate thrice in the preceding four quarters while matching on one occasion, with the average surprise being 8%. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for PayPal’s second-quarter earnings stands at 96 cents per share, down 17.2% from the year-ago quarter. It is estimated to report revenues of $7.78 billion, which suggests an increase of 6.8% from the year-ago quarter.

Arista Networks sports a Zacks Rank #1 and has an Earnings ESP of +0.95%. The company is scheduled to report second-quarter 2024 results on Jul 30. Its earnings surpassed the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 15.4%.

The Zacks Consensus Estimate for Arista Networks’ second-quarter earnings is pegged at $1.94 per share, which indicates a year-over-year increase of 22.8%. The consensus mark for revenues stands at $1.64 billion, which calls for a year-over-year jump of 12.4%.

Corning is slated to report second-quarter 2024 results on Jul 30. The company sports a Zacks Rank #1 and an Earnings ESP of +1.59% at present. Corning’s earnings beat the Zacks Consensus Estimate once in trailing four quarters while missing the same on two occasions and matching one time, the average surprise being 0.2%.

The Zacks Consensus Estimate for second-quarter earnings is pegged at 46 cents per share, which suggests an increase of 2.2% from the year-ago quarter’s earnings of 45 cents. Corning’s quarterly revenues are estimated to improve 0.3% year over year to $3.49 billion.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.

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