Logitech sales surge as locked-down families, workers stay connected

(Reuters) – Logitech International (LOGN.S) reported a big jump in sales of computer products during its fourth quarter on Tuesday as more people worked from home and families turned to technology to keep in touch during the coronavirus crisis.

Demand for video collaboration products boomed during the three months to the end of March as schools and offices shut down to prevent the spread of the virus, with locked-down staff relying on video conferencing equipment, software and webcams.

Families also connected via video conferencing as lockdown restrictions prevented them from seeing loved ones during the pandemic.

“As people shelter and self-isolate from each other physically, you need some way to get an emotional connection, and video is the way to do that,” Chief Executive Bracken Darrell told Reuters.

“It has accelerated a trend which was already moving sharply upward,” Darrell said.

Schools were holding lessons via video conference, while hospitals were using technology to lower the risks of infection, he added.

“In my home town Owensboro, Kentucky, they have mounted one of our video cameras inside a room with COVID-19 patients, and linked it to the nurse’s station,” Darrell said.

“This has enabled the doctors and nurses to enter less often and limit their exposure.”

During its fourth quarter, sales of video collaboration equipment jumped 60% and sales of webcams by 32%, the star performers as group sales rose 14% to $709.2 million.

The Swiss-American company’s operating income on a non-GAAP accounting basis rose 23% to $79 million, while net income rose 10% to $71 million.

Andrea Mueller, an analyst at Zuercher Kantonalbank, said the operating results were better than expected, and the stock was attractive because of the company’s strong balance sheet.

Its shares were 6.6% higher in mid afternoon trading, the biggest gainer on the Stoxx 600 Tech Index. .SX8P

Sales of gaming accessories – keyboards, mice, and headsets – also increased, by 8%, as people locked down at home tried to relax.

People were playing esports like motor racing against each other, and watching professionals compete as real life sporting events disappeared from the calendar, Darrell said.

“(They) are also having game nights and playing Monopoly and Scrabble remotely using our equipment to do it,” he said.

“It’s a way to connect with people when social distancing, and it will stay the way to connect with people even when social distancing is not required.”