Ingram Micro Gets Set To Report Earnings

Ingram Micro

"No one in the industry is making a lot of money right now," said Bob Anastasi, senior managing director at Raymond James and Associates. "In Ingram's case, we're not expecting them to make a whole lot of money."

Raymond James anticipates Ingram Micro to announce $6.15 billion in revenue for the quarter ended Dec. 31 and $25.2 billion, minus restructuring costs, for the 2001 fiscal year, said the firm. For the 2002 fiscal year, Raymond James expects the distributor to reach $27.5 billion, the firm said.

Anastasi said much of the slowness was due to a 15 percent to 20 percent downturn in high-tech spending in 2001, but he credited Ingram Micro for reducing costs through a massive reorganization, head count reduction and balance sheet management.

"It's hard to be way ahead of the trend when you're that big," said Anastasi. "Ingram has done a terrific job at [reducing costs, and there's more to do."

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Wall Street's investor community may also be taking more notice of Ingram Micro's business model and balance sheet management. Since the end of the third quarter, the distributor's stock has soared from less than $13 a share to a 52-week high of $18.70 a share on Jan. 9. The last time Ingram Micro's stock closed at or above $18 a share--the opening price at its IPO--was Nov. 3, 2000.

"I think we've got pretty good credibility on Wall Street right now," said Mike Grainger, Ingram Micro COO, highlighting the company's "steady improvement" and the financial community's "good appreciation of distribution."

As a segment, distributors have been concentrating on their core competencies, said Grainger. "That's been great for us, great for the distribution business, and great for the supply chain," he said. "This supply chain is pretty efficient and getting more efficient every day."

Wall Street is recognizing the value of distribution in the overall supply chain and its strength in weathering one of the slowest times ever for the industry, said Grainger. Ingram Micro has also been able to diversify its services offering to include outsourced logistics services, which help vendors and solution providers save money, he added.

"In this slow economy, we have found that Ingram has made the right internal restructuring decisions and has actually increased the apparent support for resellers," said Sean Burke, president of Goleta, Calif.-based solution provider Govplace. With its focus on the government marketplace, Govplace most enjoys Ingram Micro's product selection, increased focus on higher-margin products, marketing programs and financial services, he added.

But overall, Govplace has seen Ingram Micro pay more attention to its customers, said Burke. Last year, the Ingram Micro sales team visited the solution provider, something that didn't happen with its single, dedicated sales representative, he said.

"In 2001, Ingram Micro successfully restructured their sales personnel to a team-based environment. As a result, we've rarely heard their hold music," said Burke.