Logitech Profits Significant Down On Sub-Prime

The world’s largest computer mouse and keyboard manufacturer Logitech has today announced a significant fall in profits over its second financial quarter, as a result it says of a charge taken in respect of losses incurred on certain sub-prime linked investments.

The announcement marks the latest in a long line of finance and non-finance sector institutions to be hit by the sub-prime sector crisis, which could ultimately have a long-lasting widespread effect on the health of the global economy for years to come.

The results today reported a charge of almost $67.5 million in respect of devaluation in the investments linked to the sub-prime lending sector, which took earnings for the period down from $50 million last year to just $11.6 - a fall of 76% thanks to its failed investments.

Logitech is by no means the first company to find itself in financial difficulties over the sub-prime crisis, which saw over-leveraged investments in the mortgage market collapse in line with rising interest rates and stagnation within the housing market. As a result investments in the sub-prime and even further afield have been plagued by increased market hostility and risk, leading to devaluations in many firms with investment portfolio.

The move today saw a fall in the value of the company’s shares after it decided to delay releasing its financial results for the period as a result of the changing valuation of its investment linked assets.

Meanwhile the company has already forecast strong performance next quarter as it books the gain on disposal of the related investments of around $33.7 million, on top of profits which are expected to be in line with the true value of performance this quarter were the charge not to be considered.

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