Logitech (LOGI) - Get Report shares surged on Tuesday after the keyboard, wireless mouse and gaming joystick maker posted blockbuster fiscal second-quarter earnings and sales and also raised its full-year sales forecast amid a surge in pandemic-induced work- and play-from-home demand for its gear and devices.
Logitech reported fiscal second-quarter sales of $1.26 billion and per-share earnings of $1.87 - both well above analysts’ forecasts and above the billion-dollar mark for the first time in its history. Operating income rang in at $321.6 million vs. $68.1 million a year ago.
Logitech also said it now sees full-year sales rising between 35% and 40% from year-ago levels, up substantially from previous forecasts of sales being up between 10% and 13%. Full-year operating income is expected to fall between $700 million and $725 million vs. previous forecasts of between $410 million and $425 million.
"The growth trends that drive our business have accelerated as society adjusts to its new reality,” CEO Bracken Darrell said, noting the global shift to working from multiple locations and hybrid work culture emerging as the norm will continue to propel demand for its products.
A surge in demand for gaming “as a spectator and participant sport” also helped propel demand for the company’s gaming-specific devices, Darrell said.
Analysts were quick to boost their outlook for Logitech, with both Citigroup and Morgan Stanley praising the results.
Citi analyst Asiya Merchant noted Logitech’s “blow-out” quarter for the stock as it benefits from continued work-from-home and lockdown demand, though cautioned that “sustainability” of demand indicated closer scrutiny of the company’s medium-term growth outlook.
J.P. Morgan analyst Paul Chung was a bit more optimistic, raising his recommendation on the stock to overweight from neutral and lifting his one-year price target to 90.83 Swiss francs.
Shares of Logitech were up 17.56% at $94 in trading on The Nasdaq Stock Market. The shares have risen more than 85% year to date.