Earnings were up 33% to $0.16 a share or $30.1 million, and revenues were up 18% to $393 million. Even better, the company managed to achieve a 50% success rate on two of the key measures that fellow Fools have been harping on for the past quarter or so. Inventories were up 15% year over year, less than sales growth (the first time in a while that this has been achieved). However, the success failed to transfer over to accounts receivable, which was up a worrying 42%, more than twice sales growth. In contrast, return on equity was 27% -- continuing the trend of strong performance, since the company's five-year average return on equity is 26%.
While net margins dropped to 7.7% as part of a planned transition to a new generation of web cameras and other digital products, I think the longer-term picture should be kept in mind here. This is a company that has created a lot of shareholder value over the years, in a very competitive marketplace. Competing with Microsoft
While the company seems to be fairly valued, at a P/E ratio of roughly 20 on long-term growth expectations of around 16%, the accounts receivable question is still a nagging one. I'll pass on this one, simply because there currently are far better bargains in technology, including Dell
- Is Logitech Losing Ground?
- Can You Hear Us Now, Plantronics?
- Foolish Forecast: Look Out for Logitech
Dell and Microsoft are both recommendations of the Motley Fool Inside Value newsletter. Looking for undervalued top-shelf stocks? Finding and recommending them is Inside Value's specialty. Try it out free for 30 days.Dell is also a pick for theStock Advisorservice.