Shares of Santa Ana’s Ingram Micro Inc., the top distributor of technology products, software and consumer electronics, slipped Tuesday after the company lowered its outlook for the current quarter.
Investors sent the stock down about 3% at close of trading on a recent market value of roughly $3 billion.
For the quarter ending Sept. 27, Ingram Micro expects to report sales of $8.3 to $8.6 billion, down from its previous forecast of $8.5 to $8.8 billion.
The new outlook is less than analysts’ expected $8.7 billion in revenue.
Including about $5 million in charges for a cost-cutting program in North America and Europe, the company is looking for profits of $30 million to $39 million, down from its previous outlook of $51 million to $60 million and well short of analysts’ expectation of $61 million.
Chief Executive Greg Spierkel cited weaker demand in Europe and North America as the biggest reason for the lowered expectations.
“The pace of the downturn is more rapid than expected,” he said in a statement.
Spierkel said that the uptick in consumer spending that typically happens in September was slower than usual.
“It’s now clear that this economic softness is continuing into September, which is exerting greater pressure on operating margins,” he said. “In Europe, we are not seeing the typical September bounce back from the summer holidays. North America seemed to be relatively stable in the summer months, but we’re experiencing broad-based softness in September.”
Ingram is set to continue its cost-cutting plans, which are expected to save $18 million to $24 million annually starting next year.
The company is set to report third quarter results on Oct. 23.
