Ingram Micro Reports Strong Second-Quarter Earnings

The Santa Ana, Calif.-based distributor reported earnings of $41.7 million, or 26 cents per share, compared with earnings of $25.9 million, or 16 cents per share, in the year-ago period. The results include $9.6 million in charges related to the company&'s outsourcing plan, the integration of its Tech Pacific organization and a $2.2 million benefit related to the sale of some securities.

Ingram earned 30 cents per share, excluding the charges, which beat Thomson Financial/First Call&'s consensus estimate of 27 cents per share.

Sales in the quarter were $6.84 billion, compared with $5.72 billion for the same period last year. Analysts had predicted $6.78 billion in revenue for the company.

"Our disciplined approach and successful diversification strategy produced excellent results," said Ingram CEO Greg Spierkel in a statement. "Sales grew at a double-digit rate for the seventh consecutive quarter. Operating income hit the highest second-quarter level since 1999. We made considerable progress towards achieving our goals but will not rest on our laurels. We remain committed to continuous improvement, innovation and differentiation to deliver ever-increasing value to our business partners and shareholders."

In North America, sales increased 4 percent to $2.92 billion. European sales increased 15 percent to $2.42 billion, while Asia-Pacific sales increased 115 percent to $1.2 billion, primarily due to Tech Pacific, and Latin American sales increased 23 percent to $302 million.

Ingram Micro&'s gross margin was 5.37 percent, eight basis points lower than the year-ago quarter due to the competitive environment in North America and economic softness in parts of Europe, according to the statement.

For the third quarter ending Oct. 1, Ingram expects sales between $6.8 billion and $7 billion, and earnings per share excluding special items in the range of $48 million to $53 million, or 29 cents to 32 cents per share.

"The third-quarter guidance is a further indication of our ongoing efforts toward growth, improvement and diversification," Spierkel said in the statement. "It reflects double-digit sales growth vs. a year ago. It incorporates approximately 11 weeks of results from the recently completed acquisition of Avad, which positions us as the leading distributor in home automation and a powerful force in the consumer electronics market. This transaction, coupled with last year's acquisitions of Nimax and Tech Pacific, are examples of our successful diversification strategy, allowing us to drive solid results despite softer macroeconomic and competitive environments. We will continue to pursue this strategy to mitigate risk and drive differentiation."

Ingram shares closed at $16.36, down 49 cents or 3 percent, on Thursday.