Tech Data Misses 2Q Expectations

Tech Data earned $33.5 million, or 56 cents per share, on $5.08 billion in revenue for the second fiscal quarter ended April 30. The results compare to $34.7 million in net income, or 59 cents per share, on $4.82 billion in revenue for the same period last year. Wall Street had expected earnings of 60 cents per share, according to Thomson Financial/First Call.

"Our Americas team drove sales to the high end of our planned range for the period, but our operating performance was adversely affected by the demand environment in EMEA," said Chairman and CEO Steve Raymund, in a statement. "We are swiftly responding to the challenging EMEA market conditions by launching a formal restructuring program in the region to improve profitability."

Tech Data has started a restructuring program for Europe and the Middle East that will cost the company between $40 million and $50 million over the next five to six quarters, according to the company. The initiative is expected to generate annualized savings in the same range and, combined with an ongoing IT system upgrade, Tech Data expects to achieve savings between $55 million and $65 million per year.

For the third quarter ending July 31, Tech Data expects sales between $4.7 billion and $4.85 billion and net income of $24 million to $27 million, or 40 cents to 45 cents per diluted share. Wall Street was projecting earnings of 56 cents for the same period.

Tech Data shares closed at $35.61, down 17 cents per share, on Thursday.