Shares of Santa Ana’s Ingram Micro Inc., the biggest distributor of technology products, software and consumer electronics, fell Thursday after the company gave a cautious outlook for the current quarter.
Investors sent the stock down 2% in afterhours trading on a recent market value of $3 billion.
Ingram Micro didn’t give a financial outlook for the current quarter, but Chief Executive Greg Spierkel made some cautious remarks.
He said the company doesn’t “anticipate an economic rebound in the near term” but expects to see some benefits from a big cost cutting program that it wrapped up earlier this year.
The program, which started at the end of 2008, is expected to save about $25 million per quarter, Spierkel said in a statement.
“While the demand picture is not deteriorating, we believe that the road to recovery will be protracted over a number of quarters as unemployment weighs on the confidence levels of consumers and small businesses,” he said. “Our customers are fundamentally sound, but they remain understandably cautious until more economic indicators turn positive.”
The company has been hit by a double-whammy during the downturn as corporations and consumers pull back on their technology spending and prices for technology goods fall amid slumping demand.
Ingram’s bread-and-butter business gets the slimmest of profits,it nets pennies on the dollar.
For the current quarter Wall Street analysts, on average, are looking for profits of $36 million on sales of $6.8 billion.
The tepid outlook comes on the heels of Ingram Micro’s second-quarter results, which fell short of Wall Street’s expectations on sales but beat on profits.
For the three months through July 4, Ingram reported sales of $6.6 billion, down 25% from the same period a year earlier and just shy of analysts’ expected $6.7 billion in revenue.
Excluding charges for restructuring and cost-reduction programs, the company posted profits of roughly $53 million, down 57% from the year-ago quarter and beating analysts’ expectation of $32 million in adjusted profits.
Including charges, Ingram saw profits of $25 million, down 58% from the year-ago quarter.
Still, some investors seem to be betting on an Ingram Micro turnaround. Shares are up nearly 40% since the start of the year.
