As most firms on Wall Street begin to report their first quarterly earnings of the new fiscal year, Logitech (Nasdaq: LOGI) is once again several time zones ahead of the pack. When it reports earnings next week, the Swiss computer-peripherals maker will be wrapping up fiscal 2008 for good. Q4 news is due out just the other side of the weekend.

What analysts say:

  • Buy, sell, or waffle? Twenty analysts now follow Logitech, giving it an unlucky 13 buy ratings, and a lucky seven holds. Hope you're not superstitious ...
  • Revenue. On average, analysts expect quarterly sales to grow 16% to $592.7 million.
  • Earnings. Profits are predicted to rise 10% to $0.32 per share.

What management says:
Oh, enough with the webcams already! For three quarters in a row, Logitech has blamed Microsoft (Nasdaq: MSFT) for taking away some of its camera market share, warned that this may continue, or confirmed that it's happening -- especially in Europe, where total sales grew just 4% last quarter.

I say it's high time that Logitech shifted the story to growth in its sales of new products, like its groundbreaking line of remote controls. That, or it has to pay Microsoft back for kibitzing by developing its own operating system. Hey, they can't do worse than Vista, right?

What management does:
And yet, as sales disappoint, Logitech continues to excel at extracting profits from what sales it does make. Rivals Sony (NYSE: SNE), Nam Tai (NYSE: NTE), Philips (NYSE: PHG), and Plantronics (NYSE: PLT) continue to lag Logitech, as its gross margins continue their relentless march upward -- and begin to pull operating margins up along with them.

Margins

9/06

12/06

3/07

6/07

9/07

12/07

Gross

32.5%

33.7%

34.3%

34.9%

35.4%

35.6%

Operating

10.9%

11.5%

11.2%

11.0%

11.8%

12.1%

Net

10.4%

11.1%

11.1%

10.7%

8.5%

9.9%

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:
On the other hand, perhaps Foolish investors should be hoping that the webcam issue continues to wear on Mr. Market's nerves a bit longer. With margins growing, management expecting "more than 20%" earnings growth for fiscal 2008, and analysts predicting 16% annual growth over the next half-decade ... well, it can't be much longer before people notice that 14 times free cash flow is an awfully small price to pay for such stellar growth prospects. Get this one while it's still cheap.

What did we expect out of Logitech last time around, and what did we get? Find out in:

Fool contributor Rich Smith does not own shares of any company named above. Microsoft is an Inside Value pick. The Motley Fool has a disclosure policy.