Orange County Business Journal

Ingram Micro Hits Target on Revenue, Profits

Chris Casacchia Thursday, July 28, 2011

Santa Ana-based Ingram Micro Inc. on Thursday reported second quarter profits and revenue in line with Wall Street estimates.

Ingram, the biggest distributor of computers, software and other technology products, said profits topped $59.7 million, down 12% from a year earlier.

The company blamed ongoing disruptions in its systems overhaul in Australia for the drop.

Analysts on average forecasted profits in the June quarter of $59.5 million.

Revenue in the second quarter hit $8.7 billion, up 7% from a year ago and in line with consensus estimates.

Shares of Ingram Micro were up less than 1% in after hours trading Thursday to a market value of about $2.7 billion.

Demand for commercial products remains “solid,” but soft consumer demand in Europe and parts of Asia-Pacific trimmed sales and profits, according to Chief Executive Gregory Spierkel.

Sales in Europe, Middle East and Africa grew 11% to $2.6 billion, about 30% of total sales.

Asia-Pacific sales increased 5% from a year ago to $1.9 billion, about 22% percent of total sales.

Ingram was helped by foreign currency exchange rates, the company said.

Ingram runs on the slimmest of profits. It nets pennies on the dollars.

The company's gross margin was 5.25% in the second quarter, down from 5.36% a year earlier.

The decline was attributed to the operational disruptions in Australia and less demand in Asian and European consumer markets.

In recent years, the company has focused on providing its reseller customers more services that get better profit margins, including help with financing and logistics.

Ingram is undergoing a systems overhaul around the world and disruptions in Australia were largely blamed for its poor first quarter performance that missed Wall Street expectations and dogged the company since then.

The Australian system is scheduled to be completed in three years and will improve automation, operations and services for customers and partners around the world, Spierkel said in earlier statements.

In typical Ingram style, Spierkel provided comments about the current quarter but no financial guidance.

Analysts are forecasting profits in the September quarter of $69.2 million on revenue of $8.9 billion.