KOLKATA: ITC plans to invest up to Rs 5,000 crore buying shares of its rivals across sectors it operates in, its chairman YC Deveshwar said.
"We currently have a liquidity in our books to the tune of Rs 4,000-5,000 crore of funds. We would like to deploy it as equity investments in sectors where we operate, have a thorough understanding and hence feel safer about our investment," he told newsmen after the company's 100th AGM here on Friday.
The cigarettes-to-hotels conglomerate will look at a wide range of rival companies in FMCG, IT and agri-products for treasury investment. ITC also plans to get into dairy business, making pasteurised milk, milk powder, cheese, milk chocolates and butter, Deveshwar told the AGM. "It's actually a compliment to rivals if we invest in them. As far as I know, some of them are actually happy with our investment," said Deveshwar.
ITC's investment inEast India Hotels (EIH) andHotel Leelaventure have yielded handsome returns. The company boughtEIH shares at Rs 35, and on Friday it closed at Rs 96.05 on the BSE. Hotel Leelaventure share closed at Rs 45.75. ITC also holds stakes in cigarette companyVST Industries and food companyAgro Tech Foods, which makes Sundrop oil and ACT II popcorn.
ITC, which holds little less than 15% in EIH and Leelaventure, had at one point created a takeover threat in both these companies. Asked whether ITC may increase its stake in EIH and Leelaventure up to 25%-the new trigger point for mandatory buyout offer as per market regulator Sebi's new takeover code-Deveshwar said the company will do so if the share price is attractive. "It will be decided by the treasury. If required, we may also sell shares if prices are attractive," he said.
ITC also plans to enter the dairy business by rolling out products like pasteurised milk, skimmed milk powder, cheese, milk chocolates and butter. "We are starting a project in Munger in Bihar where we are engaged in animal husbandry project to improve the yield of cattle. The first products to be launched in the market will be ghee and skimmed milk powder," he said.
Deveshwar said in the AGM that ITC plans to turn its personal care and branded food business profitable over the next six year.
Success in my Habit
Friday, July 29, 2011
JLL launches separate consultation arm for non-realty firms
NEW DELHI: The country's largestproperty consultantJones Lang LaSalle India today said it has started a new arm to service non-realty focused companies that want to put in money in the sector as an investment purpose only.
The company has launched a new division -- JLL Corporate Finance, which has already brokered some high profile deals such asJet Airways tying up with Godrej Properties to develop 2.5 acres land in Bandra Kurla Complex andMafatlal Industries selling 7.6 acres land to Piramal Realty for Rs 605.80 crore.
"Real estate as an investment and asset class has existed in India almost forever. However, this sector has also been limited in many respects by a severe dearth of information.
"JLL Corporate Finance will assist corporates to make informed decisions about acquiring, disposing of or optimally utilising their real estate, regardless of whether they occupy it or have acquired it purely from an investment perspective," Jones Lang LaSalle (JLL) India Chairman and Country Head Anuj Puri said in a statement.
The consultant firm said every business is functionally into real estate as traditionally all Indian corporates have parked funds in this sector when they have excess liquidity, especially when they perceive the property market to be down.
However,JLL India said not all companies or businesses have has the expertise required to make sound business decisions about their realty holdings.
"During times of market improvement or when they require liquidity to rake back into their business, they tend to monetise their real estate holdings," it added.
JLL Corporate Finance Managing Director Ambar Maheshwari said the companies, for whom real estate is not a core business focus, are engaged in such dealings on a gut-feel and promoter-driven perspective.
"Such a perspective can only come with a sound understanding of the real estate sector, which is extremely important when it comes to addressing the shareholder value issue. Real estate is a substantial asset class and unless corporates optimise the returns their real estate portfolios yield, shareholder value is compromised," he added.
The company has launched a new division -- JLL Corporate Finance, which has already brokered some high profile deals such asJet Airways tying up with Godrej Properties to develop 2.5 acres land in Bandra Kurla Complex andMafatlal Industries selling 7.6 acres land to Piramal Realty for Rs 605.80 crore.
"Real estate as an investment and asset class has existed in India almost forever. However, this sector has also been limited in many respects by a severe dearth of information.
"JLL Corporate Finance will assist corporates to make informed decisions about acquiring, disposing of or optimally utilising their real estate, regardless of whether they occupy it or have acquired it purely from an investment perspective," Jones Lang LaSalle (JLL) India Chairman and Country Head Anuj Puri said in a statement.
The consultant firm said every business is functionally into real estate as traditionally all Indian corporates have parked funds in this sector when they have excess liquidity, especially when they perceive the property market to be down.
However,JLL India said not all companies or businesses have has the expertise required to make sound business decisions about their realty holdings.
"During times of market improvement or when they require liquidity to rake back into their business, they tend to monetise their real estate holdings," it added.
JLL Corporate Finance Managing Director Ambar Maheshwari said the companies, for whom real estate is not a core business focus, are engaged in such dealings on a gut-feel and promoter-driven perspective.
"Such a perspective can only come with a sound understanding of the real estate sector, which is extremely important when it comes to addressing the shareholder value issue. Real estate is a substantial asset class and unless corporates optimise the returns their real estate portfolios yield, shareholder value is compromised," he added.
Ford to create 5,000 jobs in Gujarat
GANDHINAGAR: US automobile majorFord will invest $1 billion (Rs.4,000 crore) to manufacture cars and engines at an integrated facility at Sanad in Gujarat, generating 5,000 jobs, the company announced Thursday.
Ford has entered signed a memorandum of understanding (MoU) with theGujarat government to construct the facility, a company statement said. The construction of both the plants will begin later this year, with the first vehicle and engine scheduled to come off the line in 2014, it added.
"We selected Gujarat because of its pro-business environment, infrastructure, access to ports in northwestern India and skilled workforce," said Joe Hinrichs, president and chief executive, Ford Asia Pacific and Africa regions.
"The facilities (will be used for) stamping, body, paint and assembly operations for vehicle manufacturing, as well as machining and assembly operations for engine manufacturing," the statement said.
"The vehicle manufacturing plant will have an initial annual capacity of 240,000 units, and the engine plant will have an initial annual capacity of 270,000 engines," the statement said.
Ford has entered signed a memorandum of understanding (MoU) with theGujarat government to construct the facility, a company statement said. The construction of both the plants will begin later this year, with the first vehicle and engine scheduled to come off the line in 2014, it added.
"We selected Gujarat because of its pro-business environment, infrastructure, access to ports in northwestern India and skilled workforce," said Joe Hinrichs, president and chief executive, Ford Asia Pacific and Africa regions.
"The facilities (will be used for) stamping, body, paint and assembly operations for vehicle manufacturing, as well as machining and assembly operations for engine manufacturing," the statement said.
"The vehicle manufacturing plant will have an initial annual capacity of 240,000 units, and the engine plant will have an initial annual capacity of 270,000 engines," the statement said.
MediaTek buys 10% in Spice Digital for $20 million
NEW DELHI: Taiwan's MediaTek, maker of chips used in mobile phones, picked up a 10% stake in Indian value-added services playerSpice Digital for $20 million, valuing the company at $200 million, or 883 crore.
MediaTek chairman Ming-Kai Tsai said: "Through this investment in Spice Digital, we are hoping to capitalise on its market potential and reinforce its strong operator relationship and leading position in India, SEA, Africa and Middle East."
This is the latest move by MediaTek, which already has presence in India, to expand into the fast growing economy and its booming telecom market. Mobile value-added service market in India is expected to grow 100% over five years and will constitute about 10% of total telecom revenue for Indian operators, according to market research.
MediaTek chairman Ming-Kai Tsai said: "Through this investment in Spice Digital, we are hoping to capitalise on its market potential and reinforce its strong operator relationship and leading position in India, SEA, Africa and Middle East."
This is the latest move by MediaTek, which already has presence in India, to expand into the fast growing economy and its booming telecom market. Mobile value-added service market in India is expected to grow 100% over five years and will constitute about 10% of total telecom revenue for Indian operators, according to market research.
ONGC, Sistema may soon merge assets in Russia
NEW DELHI: Oil and Natural Gas Corporation (ONGC) is scrutinising data of Russian blocks of theSistema group, preparatory to finalising a seven-month old proposal to merge their assets in Russia to create giant energy firm that will be 25% owned by Indian firm's overseas armONGC Videsh (OVL), two oil ministry officials said. They said Sistema was also studying data of OVL's Russian assets held by Imperial Energy.
"The valuation of companies will be ascertained after that," one official said, requesting anonymity.OVL acquired Imperial Energy in 2009 for $2.1 billion. OVL managing directorJoeman Thomas confirmed the development. "We have received data from Sistema very recently. It may take couple of months to analyse data before we take a decision," he told ET.
Last December, energy majors of two countries had announced a mega-merger of three companies - Bashneft, RussNeft and Imperial Energy - that would make ONGC a shareholder in Russian firms' annual oil production of 25 million tonnes, refining capacity of 20 million tonnes a year, and discovered oilfields Trebs and Titov. The merger is expected to bail out Imperial Energy that is struggling to be profitable due to high taxes imposed on foreign oil and gas in Russia.
Earlier, Thomas told reporters the company was expecting a tax relief from the Russian authorities. "So far, we have been able to manage operating profit of $15-16 per barrel before capex and opex (capital expenditure and operating expenditure)," he said. India is demanding exemption from mineral extraction tax and a 10-year tax holiday from export duty for Imperial Energy as its assets are located in difficult geographical terrain.
Russia provides tax relief to companies operating in similar geographical regions such as East Siberia. The proposed merger deal will also give ONGC an immediate access to the biggest discovered oilfields in Russia, Trebs and Titov, which India was eyeing for a long time. The fields have estimated 200 million tonnes recoverable reserves, equivalent to 35% of ONGC's total oil reserves. The deal is significant for India that imports 80% of the oil it consumes.
The deal, which does not involve any cash transaction, was announced in December 21, 2010, during the official visit of PresidentDmitry Medvedev to India. Sistema has 75% direct stake in Bashneft that produces 13 million tonnes of oil from fields in Russia.
"The valuation of companies will be ascertained after that," one official said, requesting anonymity.OVL acquired Imperial Energy in 2009 for $2.1 billion. OVL managing directorJoeman Thomas confirmed the development. "We have received data from Sistema very recently. It may take couple of months to analyse data before we take a decision," he told ET.
Last December, energy majors of two countries had announced a mega-merger of three companies - Bashneft, RussNeft and Imperial Energy - that would make ONGC a shareholder in Russian firms' annual oil production of 25 million tonnes, refining capacity of 20 million tonnes a year, and discovered oilfields Trebs and Titov. The merger is expected to bail out Imperial Energy that is struggling to be profitable due to high taxes imposed on foreign oil and gas in Russia.
Earlier, Thomas told reporters the company was expecting a tax relief from the Russian authorities. "So far, we have been able to manage operating profit of $15-16 per barrel before capex and opex (capital expenditure and operating expenditure)," he said. India is demanding exemption from mineral extraction tax and a 10-year tax holiday from export duty for Imperial Energy as its assets are located in difficult geographical terrain.
Russia provides tax relief to companies operating in similar geographical regions such as East Siberia. The proposed merger deal will also give ONGC an immediate access to the biggest discovered oilfields in Russia, Trebs and Titov, which India was eyeing for a long time. The fields have estimated 200 million tonnes recoverable reserves, equivalent to 35% of ONGC's total oil reserves. The deal is significant for India that imports 80% of the oil it consumes.
The deal, which does not involve any cash transaction, was announced in December 21, 2010, during the official visit of PresidentDmitry Medvedev to India. Sistema has 75% direct stake in Bashneft that produces 13 million tonnes of oil from fields in Russia.
Data shows deeper US recession, sharper slowdown
WASHINGTON: The Great Recession" was even greater than previously thought, and theUS economy has skated uncomfortably close to a new one this year.
New data on Friday showed the 2007-2009US recession was much more severe than prior measures had found, with economic output declining a cumulative of 5.1 per cent instead of 4.1 per cent.
The report also showed the current slowdown began earlier and has been deeper than previously thought, with growth in the first quarter advancing at only a 0.4 per cent annual pace.
The data indicated the economy began slowing in the fourth quarter of last year before high gasoline prices and supply chain disruptions from Japan's earthquake had hit, suggesting the weakness is more fundamental and less temporary than economists had believed.
The annual revisions ofUS GDP data from the Commerce Department showed economic growth contracted at an annual average rate of 0.3 per cent between 2007 and 2010. Output over that stretch had previously been estimated to have been flat.
At the depth of the recession in the fourth quarter of 2008, output plummeted at an annual rate of 8.9 per cent -- the steepest quarterly decline since 1958, and 2.1 per centage points more than previously reported.
For a table, see see [ID:nCLATIE70O] The recession was already the deepest since the Great Depression and, while it still pales in comparison, the data help explain why it is taking so long to shake off its legacy.
"The general picture of the recession remains pretty much the same, it was a record decline before and now it is a even bigger decline,"Steven Landefeld, the director of the department'sBureau of Economic Analysis, told reporters.
New data on Friday showed the 2007-2009US recession was much more severe than prior measures had found, with economic output declining a cumulative of 5.1 per cent instead of 4.1 per cent.
The report also showed the current slowdown began earlier and has been deeper than previously thought, with growth in the first quarter advancing at only a 0.4 per cent annual pace.
The data indicated the economy began slowing in the fourth quarter of last year before high gasoline prices and supply chain disruptions from Japan's earthquake had hit, suggesting the weakness is more fundamental and less temporary than economists had believed.
The annual revisions ofUS GDP data from the Commerce Department showed economic growth contracted at an annual average rate of 0.3 per cent between 2007 and 2010. Output over that stretch had previously been estimated to have been flat.
At the depth of the recession in the fourth quarter of 2008, output plummeted at an annual rate of 8.9 per cent -- the steepest quarterly decline since 1958, and 2.1 per centage points more than previously reported.
For a table, see see [ID:nCLATIE70O] The recession was already the deepest since the Great Depression and, while it still pales in comparison, the data help explain why it is taking so long to shake off its legacy.
"The general picture of the recession remains pretty much the same, it was a record decline before and now it is a even bigger decline,"Steven Landefeld, the director of the department'sBureau of Economic Analysis, told reporters.
HCL Technologies to hire 3,000 people in Q1
Software exporter HCL Technologies (HCLT) today said it will hire about 3,000 people in the July-September quarter."We have already hired 3,000 people in the June quarter. In this quarter, we will hire an additional 3,000 freshers," HCLT Chief Executive Vineet Nayar told reporters here.
The Indian IT industry is ramping up its headcount as it gears up to meet renewed demand for IT services following a slump during the economic meltdown.
The companies are also building up bench strengths to handle the bigger size and variety of projects they expect to grab in the coming months.
Larger rival Tata Consultancy Services ( TCS)) plans to hire about 60,000 people this fiscal, while peers Wipro and Infosys are also hiring aggressively.
The move to hire more people, coupled with wage hikes, will have an impact of about 300 basis points on the first quarter numbers of HCLT.
"We expect the September quarter margins to drop 300 basis points. Of this, about 250 bps would be on account of wage hikes and the remaining 50 bps on new hires," Nayar said.
The company, which follows a July-June fiscal, has given a 12-14 per cent wage hike for its Indiastaff, while onsite salaries have been increased by 2-3 per cent. The wage hikes are effective July 1.
HCLT is, however, confident of making up for the drop in margins. "Though we are expecting a 300 bps drop in margins in Q1, we will recover in the next three quarters," he said.
The company also plans a capital expenditure of USD 230 million in FY'12.
"Last year, our capex was at USD 170 million. This year, we are stepping up our capex to USD 230 million. Most of this will go toward expansion of campuses," HCLT Chief Financial Officer Anil Chanana said.
The Indian IT industry is ramping up its headcount as it gears up to meet renewed demand for IT services following a slump during the economic meltdown.
The companies are also building up bench strengths to handle the bigger size and variety of projects they expect to grab in the coming months.
Larger rival Tata Consultancy Services ( TCS)) plans to hire about 60,000 people this fiscal, while peers Wipro and Infosys are also hiring aggressively.
The move to hire more people, coupled with wage hikes, will have an impact of about 300 basis points on the first quarter numbers of HCLT.
"We expect the September quarter margins to drop 300 basis points. Of this, about 250 bps would be on account of wage hikes and the remaining 50 bps on new hires," Nayar said.
The company, which follows a July-June fiscal, has given a 12-14 per cent wage hike for its Indiastaff, while onsite salaries have been increased by 2-3 per cent. The wage hikes are effective July 1.
HCLT is, however, confident of making up for the drop in margins. "Though we are expecting a 300 bps drop in margins in Q1, we will recover in the next three quarters," he said.
The company also plans a capital expenditure of USD 230 million in FY'12.
"Last year, our capex was at USD 170 million. This year, we are stepping up our capex to USD 230 million. Most of this will go toward expansion of campuses," HCLT Chief Financial Officer Anil Chanana said.
Nintendo posts loss, slashes 3DS prices
Japan's Nintendo reported a first-quarter loss, lowered its annual forecast and slashed the price of its 3DS handheld console by 40 per cent less than six months after its launch.
The gaming giant booked a net loss of 25.5 billion yen ($327.9 million) for the April-June quarter and cut its forecast for the year to March 2012 to a net profit of 20 billion yen, down 74.2 per cent from the previous year.
Nintendo also said it would slash the price of its 3DS handheld console, released in February, from 25,000 yen to 15,000 yen from August 11 in Japan, to be followed by similar cuts in foreign markets by September.
The 3DS, the world's first video game console with a 3D screen that works without special glasses, globally sold 710,000 units and 4.53 million game titles during the period.
Its price will be lowered to generate "momentum" for the device before the key year-end shopping season, Nintendo said.
Meanwhile, the Wii home console sold 1.56 million units, thanks mainly to price cuts in the European and US markets. But the Wii business also suffered from having a limited number of mega hit game titles.
In the first quarter, Kyoto-based Nintendo -- which like other game makers faces stiff competition from smart phones and tablet computers -- said a limited number of megahit game titles and a soaring yen hurt its earnings.
A surging yen against the dollar, the inventory markdown due to the planned price cuts, global advertisement and promotional costs for the 3DS, plus research and development costs for new products, also weighed on the earnings.
The company lowered its exchange rate projections for the dollar from 83 yen to 80 yen and for the euro from 120 yen to 115 yen. In the first quarter last year, the company valued the dollar at an average of 92 yen.
"These factors considerably decreased profits," Nintendo said.
Nintendo in June announced a plan to launch a Wii U" console in 2012, as the global game sector becomes increasingly crowded with competitors.
The gaming giant booked a net loss of 25.5 billion yen ($327.9 million) for the April-June quarter and cut its forecast for the year to March 2012 to a net profit of 20 billion yen, down 74.2 per cent from the previous year.
Nintendo also said it would slash the price of its 3DS handheld console, released in February, from 25,000 yen to 15,000 yen from August 11 in Japan, to be followed by similar cuts in foreign markets by September.
The 3DS, the world's first video game console with a 3D screen that works without special glasses, globally sold 710,000 units and 4.53 million game titles during the period.
Its price will be lowered to generate "momentum" for the device before the key year-end shopping season, Nintendo said.
Meanwhile, the Wii home console sold 1.56 million units, thanks mainly to price cuts in the European and US markets. But the Wii business also suffered from having a limited number of mega hit game titles.
In the first quarter, Kyoto-based Nintendo -- which like other game makers faces stiff competition from smart phones and tablet computers -- said a limited number of megahit game titles and a soaring yen hurt its earnings.
A surging yen against the dollar, the inventory markdown due to the planned price cuts, global advertisement and promotional costs for the 3DS, plus research and development costs for new products, also weighed on the earnings.
The company lowered its exchange rate projections for the dollar from 83 yen to 80 yen and for the euro from 120 yen to 115 yen. In the first quarter last year, the company valued the dollar at an average of 92 yen.
"These factors considerably decreased profits," Nintendo said.
Nintendo in June announced a plan to launch a Wii U" console in 2012, as the global game sector becomes increasingly crowded with competitors.
Alibaba launches smartphone running its Cloud OS
Alibaba Group launched its first self-developed mobile operating system andsmartphone on Thursday in a bid to capture a slice of China's rapidly growing mobile Internet market.
The cloud computing-based operating system, Aliyun, will run the K-Touch Cloud Smartphone, to be launched at the end of July in 10 colours, saidWang Jian, president ofAlibaba Cloud Computing, a unit of Alibaba Group.
A tablet PC running the Aliyun OS, which is based on a customised Android system, will also be launched in China by the end of the year, Wang told reporters after a presentation inBeijing.
Handset manufacturer Tianyu will manufacture the K-Touch as well as the tablet, Wang said.
"Mobile users want a more open and convenient mobile OS, one that allows them to truly enjoy all that the Internet has to offer, right in the palm of their hand, and the cloud OS, with its use of cloud-based applications, will provide that," said
The Aliyun operating system will feature cloud services such as email, Internet search and support for web-based applications. Users will not be required to download or install applications onto their mobile devices, Wang said.
Alibaba Cloud plans to integrate the operating system with other devices including mobile phones with larger screens and tablet computers in the coming months.
Wang said the company was looking to launch tablet computers running Aliyun by the end of the year.
The company is currently in talks with Qualcomm Inc to develop a lower-end chipset optimised to run Aliyun OS in lower-end mobile phones, Wang said. The K-Touch phones use a high-end chipset fromNvidia Corp for crisp display of intricate games.
Alibaba Group, which is 40 percent owned by Yahoo Inc , operates China's largest B2B online marketplace, Alibaba.com , and China's largest online consumer shopping site, Taobao.com.
Wang said Alibaba does not have sales targets for the K-Touch. "We are not responsible for selling the phone; we just provide the system, so there is no hard number," he said, adding that within 15 minutes of the end of Thursday's presentation, Alibaba sold 1,000 of the phones on Taobao.
Alibaba will have an English-language version of the Aliyun OS ready by the end of this year, but Wang could not say when English versions of the phones and tablets might go on sale.
Nor will Alibaba get into the phone-manufacturing business, Wang said. "We shouldn't make a phone," he said. "We're not in that ecosystem, and it's a very good decision not to make a phone."
China, the world's largest mobile phone market, has nearly 907 million mobile subscribers, according to statistics provided by the three leading telcos in June.
The cloud computing-based operating system, Aliyun, will run the K-Touch Cloud Smartphone, to be launched at the end of July in 10 colours, saidWang Jian, president ofAlibaba Cloud Computing, a unit of Alibaba Group.
A tablet PC running the Aliyun OS, which is based on a customised Android system, will also be launched in China by the end of the year, Wang told reporters after a presentation inBeijing.
Handset manufacturer Tianyu will manufacture the K-Touch as well as the tablet, Wang said.
"Mobile users want a more open and convenient mobile OS, one that allows them to truly enjoy all that the Internet has to offer, right in the palm of their hand, and the cloud OS, with its use of cloud-based applications, will provide that," said
The Aliyun operating system will feature cloud services such as email, Internet search and support for web-based applications. Users will not be required to download or install applications onto their mobile devices, Wang said.
Alibaba Cloud plans to integrate the operating system with other devices including mobile phones with larger screens and tablet computers in the coming months.
Wang said the company was looking to launch tablet computers running Aliyun by the end of the year.
The company is currently in talks with Qualcomm Inc to develop a lower-end chipset optimised to run Aliyun OS in lower-end mobile phones, Wang said. The K-Touch phones use a high-end chipset fromNvidia Corp for crisp display of intricate games.
Alibaba Group, which is 40 percent owned by Yahoo Inc , operates China's largest B2B online marketplace, Alibaba.com , and China's largest online consumer shopping site, Taobao.com.
Wang said Alibaba does not have sales targets for the K-Touch. "We are not responsible for selling the phone; we just provide the system, so there is no hard number," he said, adding that within 15 minutes of the end of Thursday's presentation, Alibaba sold 1,000 of the phones on Taobao.
Alibaba will have an English-language version of the Aliyun OS ready by the end of this year, but Wang could not say when English versions of the phones and tablets might go on sale.
Nor will Alibaba get into the phone-manufacturing business, Wang said. "We shouldn't make a phone," he said. "We're not in that ecosystem, and it's a very good decision not to make a phone."
China, the world's largest mobile phone market, has nearly 907 million mobile subscribers, according to statistics provided by the three leading telcos in June.
Logitech cuts targets, replaces CEO
Logitech , the world's biggest computer mouse maker, cut its sales target and replaced its chief executive 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.
Sales to Europe, the Middle East and Africa in the first quarter of its business year fell 14 percent, while in the Americas they rose only 1 percent.
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 percent to 7. 48 Swiss francs at 0 911 GMT, underperforming a 0.9 percent weaker Swiss index. They have plummeted more than 50 percent since January.
"The result is abysmal," said one 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 1998-2008, 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 to 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
Logitech, which also produces speakers, webcams and keyboards, faces sluggish consumer demand in Europe where a cloudy economic outlook is dampening willingness to spend.
Sales to Europe, the Middle East and Africa in the first quarter of its business year fell 14 percent, while in the Americas they rose only 1 percent.
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 percent to 7. 48 Swiss francs at 0 911 GMT, underperforming a 0.9 percent weaker Swiss index. They have plummeted more than 50 percent since January.
"The result is abysmal," said one 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 1998-2008, 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 to 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
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