The longtime rivalry between Santa Ana’s Ingram Micro Inc. and Florida’s Tech Data Corp. is pitching toward Ingram these days.
Earlier this month, Tech Data said its second-quarter profit, due Aug. 25, could be half of what it earlier expected due to problems with a massive restructuring abroad.
That’s in contrast to Ingram, which last month reported a doubling in second-quarter profit from a year earlier to $49 million. To boot, Ingram raised its third-quarter forecast, driven largely by its European operations.
Ingram is the world’s largest distributor of technology products, followed by Tech Data. The two often have seen their fortunes move in tandem. Both have bulked up on acquisitions of smaller companies and have expanded abroad in recent years.
The recent quarterly results have analysts and investors,who normally see the two companies swayed by economic forces rather than internal missteps,wondering if Ingram is pulling further ahead.
The answer seems to be in Europe.
Tech Data’s European operations grew in the past decade by way of acquisitions that created a workforce there that trumps its North American operation.
The company has been trying to untangle its European operations since cutting hundreds of jobs and consolidating operations.
At the same time, Tech Data has been installing software to help manage logistics, which has added to the company’s distractions.
“This is an execution business,” said John Coyle, an analyst with JMP Securities in San Francisco. “In the end, you can’t do all that without it having some effect.”
Ingram seems to be running on all cylinders in Europe. The credit goes to Gregory Spierkel, Ingram’s chief executive who took the helm in June.
Spierkel put together the management team that created what the company calls “best practices” software that the company credits with its success in Europe. It’s basically a database that helps the company cross-sell products to customers and better manage customer relationships.
“Our overall business is very solid right now,” said Kevin Murai, Ingram’s chief operating officer and president. “The main difference between us and peers is the relative performance in Europe. We’re focused not just on building better control process. We’ve invested in better customer relationship management infrastructure.”
For more on this story, see the Aug. 15 edition of the Business Journal.
