Ingram Micro Earns $8.8 Million In 2Q

Ingram Micro

The results include reorganization costs related to layoffs and facility consolidations, according to the company. Before reorganization costs, net income was $12.2 million, or 8 cents per share. In the year-ago quarter, net income was $2.6 million, or 2 cents per share, before reorganization costs.

Thomson Financial/First Call had projected earnings of 6 cents per share.

Revenue for the quarter was $5.35 billion, an 11 percent decline from revenue of $6.02 billion reported for the same period last year.

"Our solid results demonstrate our firm commitment to consistent financial achievement," said Kent Foster, chairman and CEO, in a statement. "We continued to make significant improvements in other key metrics. Gross margin hit 5.48 percent--the highest level since 1998--and we continued to reduce operating expenses and inventory levels. We believe that a resurgence in IT demand is inevitable, and we are taking action now to position this company for long-term profitable growth."

"The company's bottom-line performance this quarter was driven by our continued concentration on increasing gross margins and reducing our cost structure," said Thomas A. Madden, executive vice president and chief financial officer, Ingram Micro Inc. "We intend to improve our overall profitability until it reaches a best-in-class status, as we did with our balance sheet and gross margins. We are streamlining the business through reorganization and business process improvement programs, while simultaneously developing opportunities for profitable growth."

North American sales accounted for $2.96 billion, or 55 percent of Ingram Micro's total sales for the quarter, but the figure was 20 percent lower than the year-ago quarter for the region.

European sales increased to $1.61 billion, compared with $1.57 billion last year. Sales for combined Latin America and Asia-Pacific regions increased 4 percent to $783 million vs $752 million last year.

For the current quarter, Ingram Micro expects net income of between 9 cents and 11 cents per share, prior to reorganization costs of about $13.5 million to $17 million. The distributor earned 9 cents in the third quarter last year. Ingram Micro expects sales of between $5.3 billion and $5.45 billion.

"Typically, sales in the third quarter are sequentially flat, followed by a single-digit increase in the fourth quarter. Although we do not expect a return of strong IT demand in the immediate future, we are continuing our intense focus on profitability and shareowner value," Foster said. "We are pursuing several profit-enhancement initiatives that we believe will significantly improve the company's operating results. We are developing these opportunities now and expect to disclose information regarding these plans later in the third quarter."

Shares of Ingram Micro closed at $11 Wednesday, down 5 cents per share.