Logitech Shares Fall Over 12% as Supply Chain Disruption Overshadows Q2 Earnings Beat

Logitech International SA (NASDAQ:LOGI) shares declined more than 12% in pre-market trading on Wednesday after the computer peripherals manufacturer warned that semiconductor supply constraints would affect third-quarter sales, despite reporting second-quarter earnings and revenue above analyst expectations.

The company reported adjusted earnings per share of $1.51, exceeding the consensus estimate of $1.30. Revenue increased 3% year over year to $1.22 billion, slightly ahead of analysts’ forecasts of $1.21 billion.

The results marked Logitech’s eleventh consecutive quarter of revenue growth, supported by its Americas, Video Collaboration and Gaming businesses.

Semiconductor Supply Disruption Affects Third-Quarter Outlook

Logitech expects third-quarter revenue of between $1.36 billion and $1.43 billion, with a midpoint of $1.395 billion, above the analyst consensus of $1.3 billion.

However, the forecast includes an estimated $70 million to $80 million reduction in revenue resulting from a disruption at one of its semiconductor suppliers.

The supplier experienced a serious incident at its manufacturing facility, which forced operations to close at the end of June.

Although production resumed in September, the facility continues to operate below the capacity required to meet demand.

Logitech expects the supplier to restore full production by the end of the calendar year, with the disruption largely resolved by the fourth quarter.

Revenue Growth Supported by Gaming and Video Collaboration

Logitech reported continued sales growth across several business categories during the second quarter.

Chief Executive Officer Hanneke Faber highlighted the company’s product launches and regional performance.

“We delivered our eleventh consecutive quarter of growth and launched 19 new products for the holiday quarter,” Faber said. “Growth in the Americas, Video Collaboration and Gaming supported our topline growth.”

The company introduced 19 new products ahead of the holiday shopping period, while demand across its Americas operations and key product categories contributed to quarterly revenue growth.

Gross Margin Improves as Operating Profit Edges Higher

Logitech’s adjusted gross margin increased by 140 basis points to 45.2% during the second quarter.

Adjusted operating income rose 0.4% to $231 million, reflecting modest profit growth alongside higher revenue.

The company also returned $406 million to shareholders through its annual dividend payment and share repurchases during the quarter.

For the third quarter, Logitech expects adjusted operating income of between $220 million and $255 million.

Logitech Outlook

Logitech’s second-quarter results exceeded market expectations, with adjusted earnings per share of $1.51 and revenue of $1.22 billion.

However, the anticipated $70 million to $80 million impact from semiconductor supply constraints remains a factor in its near-term financial outlook.

The company expects production capacity at the affected supplier to recover by the end of 2026, with the disruption largely addressed during the fourth quarter.

Despite forecasting third-quarter revenue above analyst consensus estimates, Logitech shares fell more than 12% before the opening bell as investors assessed the potential effects of the supply chain disruption.

Logitech stock price