Ingram Earnings Increase 13 Percent, Sales Up 12 Percent

The Santa Ana, Calif.-based distributor earned $42.4 million or 26 cents per diluted share, which included special charges totaling $6.8 million, or 4 cents per share. In the year-ago quarter, Ingram Micro earned $37.6 million or 24 cents per share. The results beat Wall Street projections by a penny, according to Thomson Financial/First Call.

Revenue was $7.05 billion in the first quarter, compared with $6.28 billion in the prior-year period.

"We delivered another strong quarter despite the widely reported competitive dynamics in North America and softer economies in some markets of Europe," Kent Foster, chairman and retiring CEO of Ingram Micro, said in a statement.

North American sales were $2.94 billion, a 6 percent increase. European sales were $2.65 billion, up 1 percent . Asia-Pacific sales were $1.19 billion, an 89 percent increase that includes the acquisition of Tech Pacific. Latin America sales increased 10 percent to $279 million.

"We've been able to deliver on our commitments in large part because of our exceptional execution as well as an effective diversification strategy," Foster said in the statement. A significant portion of our revenue comes from international operations or new technologies and services. This diversification mitigates some of the volatility risks in certain markets or segments. We have been cultivating this strategy for several years and it is starting to pay off."

Ingram Micro's gross margin was 5.38 percent, down from 5.44 percent in the year-ago quarter. The company said a more competitive environment in North America and softer economies in some European markets affected gross margins.

"Every region delivered solid operating profits in challenging markets this quarter," said William Humes, executive vice president and CFO, in a statement. "Although I'm pleased with our results, there is opportunity for improvement in every region. We are making good progress on our profitable growth initiatives and we are willing to make strong and well- considered moves to hit our milestones. We are committed to becoming the profit leader in every region."

In the current quarter ending July 2, Ingram Micro expects revenue between $6.7 and $6.9 billion with net income between $41 million and $46 million, 25 cents to 28 cents per share. First Call was forecasting earnings of 25 cents per share for the second quarter. The guidance exclude any reorganization costs, special items or integration expenses.

"Our second-quarter guidance reflects year-over-year sales growth of 17 to 21 percent, driven by the additional Tech Pacific revenues and continued organic growth," said Foster in the statement. "The economies of Germany, Italy and the Netherlands continue to be a bit soft, while pricing in North America is still competitive, although not as aggressive as a few months ago. I am optimistic about the future, especially with [incoming CEO] Greg Spierkel, [President] Kevin Murai and Bill Humes managing the operations as I retire from my CEO role to become non-executive chairman."

Ingram shares closed at $14.72, down 29 cents or 2 percent Thursday.