Switzerland-based computer peripherals company Logitech International SA LOGI declared fourth-quarter fiscal 2016 adjusted earnings (including stock-based compensation expense) of 11 cents per share, beating the Zacks Consensus Estimate of 4 cents by a huge margin. The figure also rose 37.5% from the year-ago quarter figure of 8 cents. The bottom line showed strong year over year growth, driven by demand in Gaming and Video Collaboration categories. Tablet & Other Accessories segment also fared well. For full year 2016, net income came in at $162.4 million, down from $182.2 million in 2015. Inside the Headlines Net sales for the quarter declined 2.6% year over year to $430.8 million, and also lagged the Zacks Consensus Estimate of $435 million. However, the decline was related to revenues lost subsequent to the company’s exit from OEM operations. Logitech’s Retail sales for the quarter actually increased 4% year over year to $430.8 million. For the full year, sales came in at $2.02 billion, reflecting a rise of 1% over 2015.Full-year retail sales were $1.95 billion, up 9% in constant currency terms. Coming back to quarterly numbers, under Logitech’s Retail-Growth category, Gaming and Video Collaboration demonstrated remarkable growth with a robust 19% and 35% increase in revenues, respectively, to $56.1 million and $21.9 million on a year-over-year basis. Gaming benefited from the launch of the G810 Orion Spectrum Mechanical Gaming Keyboard, while Video Collaborationgrowth was driven by conference cams. However, Mobile Speakers plunged 39% year over year to $23.5 million, hurt by slowing product demand. On the other hand, Tablet & Other Accessories space finally turned its performance around, with revenues rising 18% year over year to $30.7 million. The growth was entirely driven by Logitech’s CREATE Keyboard Case for the large iPad Pro. Pointing Devices and Keyboards & Combos markets showed growth of 6% and 5% respectively. Non-GAAP gross margin expanded 90 bps year over year to 33.1% due to the negative impact of currency translation. Non-GAAP operating expenses inched down 3% year over year to $120.4 million. Non-GAAP operating income rose 2.2% year over year to $22.4 million. Divestiture Last quarter, Logitech had announced that its Lifesize division has split from the parent company to form a new private firm called Lifesize, Inc. Logitech sold 62.5% stake in Lifesize to three venture capital firms, namely, Redpoint Ventures, Sutter Hill Ventures and Meritech Capital Partners, for a total of $17.5 million. The remaining 37.5% share will be owned by Logitech. Logitech’s decision to divest Lifesize demonstrates the former’s focus on its ongoing three-year turnaround plan to reduce operational costs as well as improve profits and margins. This divesture will also help Lifesize strengthen its foothold in the expanding videoconferencing software-as-a-service (SaaS) market, as it capitalizes on the rich market experience of its new investors. In addition, Logitech recently completed its exit from the OEM mouse business, in order to improve focus on premium products for retail markets. Liquidity As on Mar 31, 2016, Logitech’s cash and cash equivalents were $519.2 million compared with $537 million as of Mar 31, 2015. Guidance Reiterated For fiscal 2017, Logitech reiterated its guidance for non-GAAP operating income to lie in the range of $185-200 million. The company expects its Retail sales to grow in the mid-single digits. Looking Ahead Logitech’s earnings results were better than expected, and the company is optimistic of better results ahead. Accordingly, Logitech expects the momentum in its Gaming category to continue in the quarters ahead on the back of a strong product portfolio. Additionally, the company anticipates its Logi BLOK cases family and other innovative product offerings to contribute to growth in the near future. Apart from this, Logitech is streamlining its videoconferencing hardware business to focus on the new cloud-based offerings. Logitech currently carries a Zacks Rank #3 (Hold). Other favorably placed stocks in the same sector include Alps Electric Co. Ltd. APELY, Identiv, Inc. INVE and LG Display Co., Ltd. LPL. All these stocks hold a Zacks Rank #2 (Buy). Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report LOGITECH INTL (LOGI): Free Stock Analysis Report LG DISPLAY-ADR (LPL): Free Stock Analysis Report ALPS ELECTRIC (APELY): Free Stock Analysis Report IDENTIV INC (INVE): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research