Ingram Micro Q1 Sales Rise, But Profits Fall On Tax Charge

Ingram Micro saw its profits slip in the first quarter as a result of a Brazilian tax charge in spite of a 9 percent rise in worldwide sales.

The Santa Ana, Calif.-based distributor posted sales of $8.25 billion for the first quarter, up 9 percent from the first quarter of 2006 when it posted sales of $7.6 billion.

Income, however, was $37 million, or 21 cents per diluted share, down from $61.7 million or 36 cents per diluted share the year before. A Brazilian tax on software resulted in a first-quarter charge of $33.8 million, or 19 cents per diluted share.

Sales in North America hit $3.28 billion, 40 percent of total revenue, up 2 percent from last year's sales of $3.21 billion. European sales represented 37 percent of total revenue at $3.05 billion, up from $2.7 billion last year. Sales in the Asia-Pacific region came in at $1.57 billion up 18 percent, and Latin American sales were $346 million, down 3 percent from last year.

"We got really strong growth out of Asia-Pacific. It's really good news about our diversification as a global company. That's a strength we feel that we have. If there's one economy, and most people are concerned about the U.S. economy being a little weaker now, the good news for us is that we have 60 percent of our business outside of North America," said CEO Greg Spierkel.

North American growth was driven, in part, by the SMB market, Spierkel said. "That still remains the drumbeat for the company and the sweet spot for the company and fortunately a fairly resilient group of customers spread around the U.S. and Canada."

Networking and wireless product sales were stronger than the overall rate of growth in North America, he said.

"We had also good double-digit growth in our two specialized divisions that are getting a lot of attention and support from us and that is the POS/data capture products and our high-end consumer electronics business division, AVAD, [which] had very strong performance in the quarter," said Spierkel.

PCs and servers sold at a slower rate than last year, with growth in unit volume but sliding average selling prices, trending flat for the first quarter, Spierkel said.

Ingram expects sales between $8 billion and $8.25 billion for the second quarter, to end on June 30, with income in the range of $59 million to $65 million, or 34 cents to 37 cents per diluted share.

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