Shares of Santa Ana’s Ingram Micro Inc., the top distributor of technology products, software and consumer electronics, fell before leveling out on Thursday after the company gave a cautious outlook for the third quarter.
The stock fell 6% in afterhours trading before flattening out on a recent market value of about $3 billion.
Excluding an estimated $7 million in charges, the company is looking for third-quarter profits in line with Wall Street expectations of about $67 million.
But cautious words from Chief Executive Greg Spierkel appeared to have spooked investors:
“We expect the macro-economic softness to continue into the third quarter,” he said. “Solid growth is expected from Latin America, but sales growth in the other regions will be more modest.”
Ingram Micro is expecting to see sales of $8.5 billion to $8.8 billion in the current quarter. The low end of its range would cuts close to analysts’ outlook of $8.8 billion in revenue.
The tempered outlook comes on the heels of Ingram’s second-quarter results, which were in line with expectations.
Ingram posted sales of $9 billion, up 8% from the same period a year ago.
Including about $6 million in charges related to its cost-cutting program in North America and Europe, the company recorded $59 million in profits, up 13% from a year earlier.
Ingram Micro operates on razor-thin margins,it nets pennies on the dollar.
The company has focused on reigning in its expenses and finding ways to mitigate higher costs for energy and fuel.
Last year it launched a cost-cutting plan that’s expected to save $18 million to $24 million a year.
