Ingram 4Q Profit Better Than Expected, CEO Says

The distribution giant posted earnings of $84.4 million, or 51 cents per share, on a GAAP basis and sales of $7.96 billion, a 7 percent year-over-year increase. Analysts expected earnings of 48 cents per share for the fourth quarter, according to Thomson Financial/First Call. Ingram shares closed the day up 28 cents to $20.19.

Ingram said the results would have been higher without the translation impact of the relatively weaker European currencies. In fact, Ingram said the weaker currencies resulted in an approximate four-percentage-point negative effect on comparisons to the similar period one year ago.

Ingram Micro CEO Greg Spierkel said the strong fourth quarter showing ended the "year on a high note."

"A strong December, coupled with exemplary cost containment, drove the better-than-expected bottom-line results for the quarter," said Spierkel in a statement. "We posted the highest sales in five years and the initiatives we have developed over the last several quarters are driving superior performance. For the full year, net income on a non-GAAP basis hit an all-time high and every region exceeded 100 basis points of non-GAAP operating income for the first time in company history. We now have four strong engines throughout the world, with each region contributing to our profitability and growth."

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Ingram's North American fourth quarter sales were $3.27 billion, an increase of 4 percent vs. year-ago sales of $3.14 billion. European sales were $3.01 billion vs. $2.99 billion in the year-ago quarter. Sales in U.S. dollars were up 1 percent over the prior-year period. The translation impact of the relatively weaker European currencies had an approximate 9 percentage-point negative impact on comparisons to the prior year.

Gross margin was 5.61 percent, down slightly from the year-ago quarter but represented a sequential increase of 12 basis points, aided by the company's strong year-end Ingram Micro Logistics business in North America.

For the first quarter ended April 1, Ingram said it expects net income to range from $54 million to $59 million, or 32 cents to 35 cents per diluted share, on sales from $7.3 billion to $7.5 billion.

"Our first-quarter guidance reflects normal seasonality, coupled with the continued translation impact of the relatively weaker European currencies, which are about 7 percent softer than this time last year," said Spierkel. "The push for 2006 will be driving growth through superior execution and differentiation. We need to proactively pursue sales in our core business and in the new areas of AIDC/POS, consumer electronics, and service offerings. I'm optimistic. The regional markets are steady, our vendors and customers continue to see the value we bring to their businesses, and our diversification efforts have positioned us well."