Logitech fizzles despite revealing 85% sales growth in latest earnings

• Logitech stock traded down on Friday despite a strong earnings report with 85% sales growth.
• The company boasted a 192% increase in EPS and raised its 2021 annual outlook.
• Logitech stock underperformed on Friday despite the news, dropping 1% to around $104 per share.

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Logitech stock traded down on Friday despite a strong earnings report for the holiday quarter.

The Swiss-American manufacturer of computer peripherals and software revealed 85% sales growth in the quarter, beating analysts’ estimates by over $400 million.

Additionally, cash flow from operations was up to $530 million versus $181 million from a year ago. And EPS grew an incredible 192% year-over-year to $2.45.

Logitech also raised its 2021 annual outlooks. The company now sees its annual sales growth of 57%-60%, up from 35%-40%.

Logitech also believes it will break the $1 billion mark in non-GAAP operating income for the first time in 2021, notching a $300 million increase over previous estimates.

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"This quarter's record results demonstrate the strength of our portfolio, addressing long-term growth trends in remote work and education, video collaboration, esports, and digital content creation," said Bracken Darrell, Logitech president, and chief executive officer.

Despite the upbeat report, shares fell by about 1% on the day to around $104 per share.

The latest results end a strong run for the company in 2020, rising some 51% as it took advantage of increased demand for webcams and microphones as remote work became the norm.

Now some investors fear that growth may fizzle as people return to the office.

Darrell spoke to Yahoo Finance about the company's prospects going forward, arguing the recent rise in sales isn't just a "pandemic boost." Darrell said the company expects to benefit from a world of "hybrid work" as people balance working from home and time in the office.

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Darrell was also asked about supply issues after strong demand led to problems in 2020. The CEO said the company had been making great strides in that area but was "still constrained in a few categories," including webcams and microphones.

Logitech currently holds a market cap of $17.6 billion and boasts seven "buy" ratings, two "neutral" ratings, and zero "sell ratings from analysts.