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November 04, 2010

Plantronics Reports Strong Second Quarter Fiscal 2011 Results

By Susan J. Campbell, TMCnet Contributing Editor


Plantronics has announced the results of its second quarter fiscal 2011 net revenues. The company enjoyed a 10 percent increase to reach $158.3 million from $144.5 million in the second quarter of fiscal 2010. Other areas also showed strong growth demonstrating a successful quarter for the company.

"Revenues in our core Office & Contact Center ("OCC") category grew in all major geographies compared with the same quarter in the prior year and were at the highest level in eight quarters, offsetting a decline in mobile headset revenue. Unified Communications (News - Alert) ("UC") product sales continue to grow, and, at $13.3 million in revenue during our second quarter, are over 10 percent of OCC sales," said Ken Kannappan (News - Alert), President & CEO, in a statement.

The company reported that net revenues were within the guidance range of $158-$163 million and its GAAP diluted earnings per share from continuing operations was $0.52 in the second quarter of fiscal 2011, compared to $0.32 in the same quarter of the prior year.

Non-GAAP diluted earnings per share from continuing operations for the second quarter of fiscal 2011 also increased 38 percent to $0.58 from $0.42 in the same quarter of the prior year.

"We generated approximately $25 million in cash flow from operations in the current quarter and repurchased over 500,000 shares of our common stock while maintaining a strong cash position with over $359 million in cash, cash equivalents and short-term investments. We also have $14.8 million in long-term investments at the end of the quarter," stated Barbara Scherer, SVP Finance and Administration & CFO.

The increase in net revenues for Plantronics (News - Alert) was driven in large part by improved economic conditions and the trend toward Unified Communications. Net revenues for the OCC were $118 million in the second quarter of fiscal 2011, compared to $93.5 million in the second quarter of the prior year. Product revenues related to UC were $13.3 million, an increase of 35 percent.

Plantronics did suffer a revenue loss in mobile net revenues, shrinking from $34.7 million in the second quarter of fiscal 2010 to $27.6 million in the second quarter of fiscal 2011, a decrease of 20 percent. Computer and gaming net revenues also shrunk from $9.0 million to $8.2 million, a 9 percent decrease.

The company maintained an operating margin of 21.5 percent with $34 million, compared with a GAAP operating income of $20.6 million and an operating margin of 14.3 percent in the second quarter 2010. Non-GAAP operating income was $38.3 million, up from $32.5 million to $35 million, producing an operating margin of 24.2 percent.

Plantronics also completed the sale of Altec Lansing (News - Alert), its Audio Entertainment Group ("AEG") segment, effective as of December 1, 2009. All results of operations related to AEG (including the loss on the sale) are classified as discontinued operations for all periods presented.

As for the company’s business outlook for the immediate future, Plantronics expects net revenues in the third quarter of fiscal 2011 to be higher than the second quarter of fiscal 2011. This increase is expected to be primarily in mobile Bluetooth headset revenues. The December quarter has traditionally been higher and current booking trends support the company’s projections.

 

 
Susan J. Campbell is a contributing editor for TMCnet and has also written for eastbiz.com. To read more of Susan’s articles, please visit her columnist page.

Edited by Chris DiMarco




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