57.5 F
Laguna Hills
Monday, Mar 18, 2024
-Advertisement-

Ingram Micro In Nascent Turnaround Down Under

Ingram Micro Inc. continues to make progress retooling its troubled Australian operations and could see a profit there by the end of year, after sustaining losses Down Under since early 2011.

“We do expect it to continue to improve,” Ingram’s new Chief Operating and Financial Officer William Humes told analysts late last month in a conference call following first-quarter earnings.

Ingram Micro executives hope the company will be in “a profitable to break-even spot by the end of the year,” he added.

Losses in Australia were about $10 million in the recently ended quarter, which also impacted the bottom line of its Asian Pacific operations significantly.

The Santa Ana-based company, despite the regional red ink, recently reported first-quarter revenue in line with Wall Street expectations and adjusted profits that topped analysts’ consensus estimates.

Ingram, the biggest distributor of computers, software and other technology products, reported sales of $8.64 billion in the March quarter, down 1% from a year earlier.

Adjusted profits before tax benefits and charges topped $64.5 million. Analysts on average had forecast an adjusted profit of $58.5 million.

The second consecutive quarter of stable sales should quell concerns that shadowed the company for most of 2011, as it dealt with problems tied to the integration of new software and hardware into its Australia operations.

Similar system integrations went smoothly in Singapore, New Zealand, Chile, the Netherlands, Belgium and Indonesia. But problems installing the software and hardware in Australia have dogged the company since last year.

It appears the company has seen the worst in the region as operations improve, Chief Executive Alain Monie said.

“Our efforts over the past year in Australia are paying off,” Monie said during the conference call. “We believe the bottom is behind us. However, there’s still work to do to return Australia to profitability as time is required to regain our customer’s confidence and loyalty.”

Disk Prices

Western Digital Corp.’s crisp execution in restoring its Thailand operation in the wake of the worst floods in the region in decades has yet to win over investors.

The company late last month reported revenue and earnings in the March quarter that beat Wall Street expectations. It also said its heavily damaged operations in Thailand can now meet supply demands.

But investors looked past the strong quarterly performance and regional assurances, trading down Western Digital shares down 20% in after-hours trading April 26 and intraday trading the following day.

The apparent reason: comments by Chief Executive John Coyne during the earnings conference call about the likely effect of some lower product prices on the current quarter.

Western Digital and the industry shipped far fewer drives in the last six months of 2011 as they dealt with widespread issues in Thailand. Some related production shortages drove prices for drives higher, and now prices are starting to drop again.

“The price declines are integral to Western Digital scaling to volume its recovered operations,” Mark Moskowitz, an analyst at the San Francisco office of New York-based JPMorgan Chase & Co., said in a note to investors.

The company shipped 44.2 million hard drive units in the March quarter, down from 51 million a year earlier, or 13%. That’s an improvement over the December quarter, when Western Digital shipped 28.5 million units.

The company’s disk drives go into computers, external storage devices, corporate networks and consumer electronics.

RTI Sold

The assets of Anaheim-based RTI Electronics Inc. have been acquired by a Florida competitor, marking the third time the company has been sold in less than three years.

Publicly traded API Technologies Corp. in Orlando, Fla., purchased the assets of RTI from its Santa Monica-based private equity parent Shackleton Equity Partners LLC for $2.3 million in cash. Shackleton purchased RTI in June 2010 for an undisclosed sum.

RTI makes electronic parts that go into audio devices, big lighting jobs and power supply gear. It saw $4 million in sales in 2011 and counts a diverse group of Fortune 500 companies in the audio, defense, aerospace and industrial industries.

RTI had roughly 60 workers in Anaheim, where the company has manufacturing and product design operations at its 52,000-square-foot factory.

St. Paul, Minn.-based IntriCon Corp., a publicly traded maker of electronics for medical devices, sold RTI in late 2009.

Want more from the best local business newspaper in the country?

Sign-up for our FREE Daily eNews update to get the latest Orange County news delivered right to your inbox!

-Advertisement-

Featured Articles

-Advertisement-
-Advertisement-
-Advertisement-
-Advertisement-

Related Articles

-Advertisement-
-Advertisement-