Computer peripherals maker Logitech returned to earnings growth with its fiscal second-quarter results, which smashed estimates for sales and profit. Logitech stock popped higher on the news Tuesday.
Logitech earned an adjusted $1.09 a share on sales of $1.06 billion in the quarter ended Sept. 30. Analysts polled by FactSet had predicted earnings of 59 cents a share on sales of $973 million.
On a year-over-year basis, Logitech earnings rose 30% while sales slid 8%. The earnings increase followed eight straight quarters of declines. However, Logitech's sales have now fallen for eight consecutive quarters.
"We made great progress toward a return to growth and exceeded our pre-pandemic profit levels," Guy Gecht, Logitech interim chief executive officer, said in a news release late Monday.
Logitech also raised its revenue outlook for the full fiscal year. It forecast sales of $4 billion to $4.15 billion, vs. its prior goal of $3.8 billion to $4 billion. The midpoint of $4.08 billion was above Wall Street's target of $4.06 billion. Last fiscal year, Logitech generated sales of $4.54 billion.
Logitech Stock Rises After Report
On the stock market today, Logitech stock surged 12.9% to close at 77.16.
"We remain cautiously optimistic on the balance of the year and are pleased to raise the annual outlook," Chief Financial Officer Chuck Boynton said in the release.
Some categories faired better than others in the September quarter. Sales of gaming peripherals dropped 12% to $282 million. Keyboards and keyboard-and-mouse combos sank 3% to $195 million. Meanwhile, computer mice and pointing devices increased 3% to $192 million.
"It was a really strong operational quarter across the board," Boynton told Investor's Business Daily. The company reduced its inventory in the sales channel and cut its costs, he said.
However, Logitech doesn't expect sales growth to return until mid- to late next year, Boynton said. The December quarter will be "an important read-through on the health of the business," he added.
LOGI Stock Is On Tech Leaders List
Barclays analyst George Wang maintained his overweight rating on Logitech stock with a price target of 81.
Logitech's guidance for the second half of its fiscal year "looks conservative even with the raised outlook," he said in a client note. Logitech should benefit from market share gains and a replacement cycle on the horizon, Wang said.
Meanwhile, Logitech ranks second out of 14 stocks in IBD's Computer Hardware and Peripherals industry group, according to IBD Stock Checkup. Logitech stock has an IBD Composite Rating of 92 out of 99.
Further, Logitech stock is on the IBD Tech Leaders list.
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