Tech Data Beats 4Q Expectations

For that period, the Clearwater, Fla.-based distributor earned $38.9 million, or 67 cents per share. Analysts had projected earnings of 54 cents per share. The results compared to a $303 million loss, $5.37 per share in the same quarter last year. The year-ago numbers include a $334.6 million goodwill impairment charge and other expenses.

"We're delighted with the results. It was primarily because of exceptional achievement in Europe," Raymund said.

Revenue for the quarter was $4.92 billion, a 22 percent increase from $4.01 billion in the year-ago period. Analysts had projected sales of about $4.61 billion.

For its 2004 fiscal year, Tech Data reported $104.1 million in earnings on $17.41 billion in sales, which compares to a $199.8 million loss on $15.74 billion in revenue for the previous year.

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European sales increased 41 percent, 18.5 percent on a local currency basis. Gross margins surpassed expectations in Europe, Raymund said.

"Gross margins were quite a bit higher than we and world expected. There are two or three reasons. Revenue in Europe was so strong it enabled us to overachieve rebate targets with vendors. Our gross profit in Europe is generally higher so when we grow faster there, our geographic mix drives higher gross margins for the quarter," he said.

Raymund, traditionally conservative when it comes to forecasting the economy, said he is still cautiously optimistic about the rest of the year.

"I don't no feel we're sliding back, but it's not like we're steaming ahead. We're probably looking at mid-single-digit growth," Raymund said.

Each product category saw areas of notable strength, Raymund said.

"In software it was security. In peripherals it was flat screen monitors, digital imaging products and supplies. We've seen growth in wireless technologies products. Systems were doing better with high-end servers and notebook products. Those areas stuck out."

The results come just two weeks after competitor Ingram Micro also surpassed expectations by a wide margin in its fourth quarter ended Jan. 3.

Ingram Micro reported net income of $46.4 million, or 30 cents per share for the quarter. Those numbers spurred shares to shoot up 22 percent the next day to $19.55. Analysts had been projecting earnings of 23 cents per share. The distributor also reported a 15 percent increase in sales to $6.76 billion for the quarter ended Jan. 3, compared with $5.88 billion in the year-ago quarter.

Tech Data shares closed at $40.55 Wednesday, down $1.07 or 2.5 percent.