Ingram Micro CEO: Q1 Results Suggest Bottom Could Be Near

Ingram Micro CEO Greg Spierkel said in a Channelweb.com interview Thursday that the distributor's first-quarter earnings performance was "not a victory lap," but encouraging enough to suggest a bottom to the economic downturn was near.

Ingram Micro reported net profit for the quarter of $27.5 million, or 17 cents a share, down from $64.1 million, or 37 cents a share, for the same period a year ago. Those numbers beat Wall Street expectations, however, most estimates had projected Ingram's profit at 13 cents a share.

Ingram Micro's revenue for the quarter fell to $6.75 billion, down from $8.58 billion in the same quarter a year ago. The number was in line with Ingram's February forecast and Wall Street's estimate of $6.71 billion. Ingram Micro attributed one-third of the revenue drop to a stronger dollar.

"I don't know if I would say the bottom is here -- you never know for sure," Spierkel said. "But I would say this: We feel good about how we finished the quarter. We've had a number of vendors in the community we work with sending out signals that they feel we're near a bottom. No one would be declaring victory or doing any victory laps yet -- you have to be a little careful. But the way we're looking at it is that we're executing really well in a challenging microeconomic environment that's the worst recession I've seen in my career. We do feel it's not getting worse. There's nothing to tell us it's getting worse."

Spierkel said recent comments from Intel CEO Paul Otellini and other vendors such as IBM were good signals from the vendor community.

"Most companies are still saying things are going to be down compared to last year," he said. "You have to sort of wade through the next two months to get a feel whether this is truly turning upward."

In retail channels specifically, Spierkel said he was seeing subnotebook computers (netbooks) and the coming of Microsoft's Windows 7 as two technologies or retail trends that would help buoy a tough retail climate going forward.

Also, while some retailers were benefiting from the void created by the closing of Circuit City three months ago, the retail downturn was still more of a factor to overall business than the loss of that major consumer electronics player.

"There's a little more concern still, to spend money on the consumer side," he said. "All the major retailers are benefiting [from Circuit City's exit] to some extent, but the broader macroeconomic picture is where the challenge is."

Spierkel described Oracle's planned acquisition of Sun as "probably a very good, and certainly an interesting, play by Oracle."

"It could go down in a number of ways, and at this point, my information is public knowledge like yours," Spierkel said. "We sell Oracle products in a number of countries, and they haven't come to us yet with any specific statements about what it means. We have a very limited amount of business with Sun -- we sell a few x86 servers but it's not a big piece of what we do. For Oracle, there's some fantastic software they have that sits on computing devices as well as mobile telephony. There are bigger questions in hardware and what kind of strategy Oracle will take there. I don't have any answers yet because in the short term, they're being pretty quiet."

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