After coming up a skosh short on earnings in Q1, Logitech (NASDAQ:LOGI) makes its second attempt at an "earnings beat" in just a few short hours -- and into the teeth of a consumer-driven recession. Hardly an ideal situation, but what are the chances Logitech can beat the odds... and the analysts?

What analysts say:

  • Buy, sell or waffle? 21 analysts now follow Logitech, doling out a dozen buy ratings, eight holds, and a sell.
  • Revenues. On average, analysts expect sales to grow 13% to $672.1 million.
  • Earnings. Profits are predicted to gain a penny at $0.43 per share.

What management says:
You probably wouldn't know it from Logitech's SEC pages, but Logitech's been quite busy this quarter. Its Omnidirectional Speaker for the Apple (NASDAQ:AAPL) iPod just won an award. It's churning out electronic gizmos customized to work with Nintendo's Wii and Electronic Arts' (NASDAQ:ERTS) games. And back at corporate HQ, the company just unveiled a shiny new share buyback program -- $250 million or bust.

What management does:
Why buy back shares now? With its stock cut nearly in half over the past year, the phrase: "No time like the present" springs to mind. Meanwhile, margins are be holding up well, and still beating rivals Sony (NYSE:SNE), and Nam Tai (NYSE:NTE). Even arch-webcam-rival Microsoft (NASDAQ:MSFT) can't compete with Logitech's margins on entertainment peripherals -- Microsoft's Micro-mired in the single digits like 'most everyone else (save Logitech.)

Margins

3/07

6/07

9/07

12/07

3/08

6/08

Gross

34.3%

34.9%

35.4%

35.6%

35.8%

35.8%

Operating

11.2%

11%

11.8%

12.1%

12.1%

11.9%

Net

11.1%

10.7%

8.5%

9.9%

9.7%

9.6%

All data courtesy of Capital IQ, a division of Standard & Poor's. Data reflects trailing-12-month performance for the quarters ended in the named months.

One Fool says:
Speaking of "unless and until," wouldn't it be nice to know if Logitech is suffering from the economic meltdown before it actually happens? We may get a clue this evening, and here's where you should look for it:

On the balance sheet. As of Q1, this document was showing all systems go: Against 18% sales growth, inventories were up a matching 18%. So as recently as July, Logitech was having no trouble moving its goods. If trouble begins to appear, though, here's where you'll find it. If inventories begin rising faster than sales, or if accounts receivable start rising too quickly, you may want to rethink the logic of owning Logitech.

For more Foolishness on Logitech, read:

Fool contributor Rich Smith does not own shares of any company named above. The Motley Fool has a disclosure policy.

Nam Tai Electronics is a Motley Fool Global Gains recommendation. Microsoft is a Motley Fool Inside Value selection. Electronic Arts, Nintendo, and Apple are Motley Fool Stock Advisor recommendations.