Logitech, the world's largest computer mouse maker, issued its second profit warning in eight weeks, slashing its forecast for full-year profit and sales after a review by its acting chief executive, sending its shares down 12 percent.
Logitech, which also makers speakers, webcams and keyboards, said on Thursday it expected operating income of about $90 million for its 2011/12 year to end-March, compared with a previous target to meet or beat last year's $143 million.
Citing the current weak economic environment in mature markets and the company's product offering, Logitech cut its sales forecast to $2.4 billion from $2.5 billion, having cut it from $2.6 billion in July when announcing CEO Gerald Quindlen had resigned after weak first-quarter trading.
Chairman Guerrino De Luca was named acting CEO at the time.
The company said on Thursday gross margin in its fiscal third and fourth quarters should be well above the full-year average.
Logitech shares, which had lost more than half their value this year, were down 12 percent at 0932 GMT.
The management completely underestimated market and technology shifts toward stand-alone mobile computing systems not requiring any peripheral interface components or simple gadgets, said Sarasin analyst Oskar Schenker.
Logitech's actual product range is (old-fashioned) ... not unique and sells only by price.
NO MORE BAD NEWS?
De Luca told Reuters the new targets were a result of a review he had undertaken since taking over and reflected collapsing consumer confidence in Europe and the United States and the fact the company had been too optimistic in the past.
I promise, this is the last of the bad news, he said in a telephone interview, adding the third quarter should show an improvement. Our product portfolio is not as strong as it should be, in the face of a tight economic situation, he said. Apple shows what you can do in bad economy.
Logitech, which also produces speakers, webcams and keyboards, is suffering from sluggish demand like Europe's biggest consumer electronics producer Philips.
Logitech launched its set-top box for Google's new Web TV service last year along with other peripheral products like a keyboard controller and a video calling device.
After failing to entice consumers, despite lowering the price to $249, the company said it would slash the price to $99 to try to drive sales. On Google-TV we are neutral. If it becomes a success, great. If not, than it should not impact Logitech, De Luca said.
Vontobel analyst Foeth said he expected De Luca to boost spending on sales and marketing. Logitech forecast a recovery for Q and Q$ telling us that the trough will be reached in the current quarter.
De Luca previously headed the company from 1998-2008.