Mouse-maker Logitech cuts targets, replaces CEO

ZURICH, SWITZERLAND: The world's biggest computer mouse-maker, Logitech, cut its sales target and replaced its chief executive officer on Thursday, after weak sales in Europe pushed it into the red in the three months to the end of June.

Logitech, which also produces speakers, webcams and keyboards, faces sluggish consumer demand in Europe where a cloudy economic outlook is dampening willingness to spend.

Its sales in Europe, the Middle-East and Africa in the first quarter of its business year fell 14 per cent, while in the Americas the figures rose only 1 per cent.

After trying to entice buyers by slashing the price on its key Google TV set-top box by $150, the firm posted a first-quarter net loss of $30 million, versus a profit of $20 million a year earlier.

In a note to clients, entitled 'Logitech hasn't yet made it out of the mouse trap', analysts at Wegelin described the group's results and outlook as disappointing.

Shares in the company sank to their lowest since October 2001, and were down 9 per cent to 7.48 Swiss francs at 0911 GMT, underperforming a 0.9 per cent weaker Swiss index. They have plummeted more than 50 per cent since January.

"The result is abysmal," said a trader in Zurich.

Philips, Europe's biggest consumer electronics producer, has also been hit by sagging consumer demand, and issued a grim outlook after a surprise quarterly loss.

To help restore confidence, Chairman Guerrino De Luca, who headed the company from 1998 to 2008, will replace Gerald Quindlen as chief executive until a permanent replacement can be found, Logitech said.

"We welcome the return of De Luca as CEO (until another candidate is identified), which may help restore some confidence," Michael Voeth of Vontobel said in a note.

After the weak first quarter, Logitech now expects sales of $2.5 billion for the 2012 fiscal year, down from an earlier forecast of $2.6 billion, a figure that had already disappointed some analysts.

It also tempered its operating income target, and now hopes to achieve a figure equal to or greater than last year's level of $143 million versus a goal of $185 million set earlier in the year.