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What happened
Shares of computer-accessory maker Logitech International (LOGI +2.09%) were surging after the company posted blowout second-quarter earnings today, roaring past estimates on the top and bottom lines. As of 11:26 a.m. EDT, the stock was up 16.2%.
So what
The maker of gadgets, including keyboards, mice, and headphones, said overall revenue was up 9%, to $564.3 million, and retail sales jumped 14%. The company closed its OEM business last year, and all sales now come from its retail division, meaning sales from continuing operations were also up 14%.
Adjusted earnings per share increased 40%, to $0.35. Both numbers easily beat Wall Street's targets, coming in at $526.3 million in revenue and $0.25 in EPS.
CEO Bracken Darrell told investors:
We've delivered an outstanding quarter -- the highest Q2 retail sales in Logitech's history -- and a first half ahead of expectations. Once more, this quarter shows our strategy clearly: new product launches that again demonstrate the power of our innovation engine, ongoing operational excellence, and profitable growth across all our regions and in almost all our market opportunities.
Sales grew in seven of Logitech's nine product categories in the quarter, with particularly strong growth in mobile speakers, audio, and video collaboration. Keyboards and mice remain its biggest categories by sales, contributing more than 40% of revenue.
Now what
Looking ahead, management projected retail sales growth of 8%-10% in constant currency for the full year, and sees non-GAAP operating income of $195 million to $205 million, which should equate to an EPS midpoint of $1.08.
Though the rise of mobile would figure to zap the earnings of computer-accessory companies like Logitech, legacy gadget makers like Logitech and Garmin have found a way to innovate and adapt to a changing market. After Logitech blew past estimates in its last two quarters, I wouldn't be surprised to see it top its full-year guidance, which looks conservative.
