Plantronics Vows to 'Vigorously Defend' Antitrust Suit Due to Go to Trial in October

Plantronics continues to believe an antitrust lawsuit (in Pacer) filed by Jabra parent GN Netcom in 2012 is “without merit” and the company will “vigorously defend” against the action, said Vice President-Investor Relations Greg Klaben, leading off the company’s FY 2017 Q2 earnings call Tuesday. Plantronics took a $5 million charge in Q1 for the ongoing litigation with GN Netcom, following imposition of $3 million sanctions set by the U.S. District Court in Wilmington, Delaware, July 6 in response to a motion GN filed alleging Plantronics Senior Vice President Don Houston intentionally deleted thousands of emails on competitive issues between Plantronics and GN/Jabra. The court also warned of possible evidentiary sanctions as the case moves toward trial and said it would instruct the jury that it may draw “an adverse inference that emails destroyed by Plantronics would have been favorable to GN’s case and/or unfavorable to Plantronics’ defense." The antitrust trial is to begin in October 2017, said Klaben. Plantronics' fiscal Q2 revenue slipped to $215 million from $216.2 million, while gross margin slipped from a year earlier on a higher mix of consumer product revenue, said Chief Financial Officer Pam Strayer. The narrowing gross margin was expected as Plantronics makes a stronger shift from its core enterprise to unified communications and consumer businesses, said Strayer. Plantronics’ mono Bluetooth revenue grew in the low single digits year-over-year, said CEO Joe Burton, and launch of the mono Bluetooth Voyager 5200 headset led to record market share in FY 2016. The company had “significant increases” in stereo Bluetooth headset sales driven by new product introductions and “increased retailer placements,” he said. Shares closed down Wednesday more than 10 percent to $45.77.