Ingram Q2 Sales Fall 25 Percent

Ingram Micro sales fell 25 percent in the second fiscal quarter ended July 4, but the distributor hinted that it may look to get more aggressive in sales opportunities now that its gross margin hit its highest Q2 level in 11 years, at 5.87 percent.

"Our efforts to protect return on invested capital and improve our business mix have delivered industry-leading balance-sheet metrics and solid gross-margin performance but have also contributed to the sales decline in recent quarters," said CEO Greg Spierkel in a statement. "We now plan to place a greater emphasis on securing incremental sales while maintaining our focus on operational excellence and profitability."

In the second quarter, Santa Ana, Calif.-based Ingram Micro reported $25.3 million in net income, or 15 cents per share, on $6.58 billion in sales. In the year-ago quarter, the company reported $58.9 million in earnings, 35 cents per share, on $8.82 billion in sales.

This year's Q2 earnings include includes costs of approximately 5 cents per share related to expense-reduction programs and a goodwill impairment charge. Excluding the charges, the company met analysts' expectations.

Weaker foreign currencies had about a 7 percent negative effect on the year-over-year comparison, according to Ingram Micro.

For the current quarter, Spierkel warned not to expect a dramatic turnaround.

"We expect the overall demand environment to follow historical seasonal patterns," he said in the statement. "While the demand picture is not deteriorating, we believe that the road to recovery will be protracted over a number of quarters as unemployment weighs on the confidence levels of consumers and small businesses."

Ingram Micro's solution-provider customers will remain cautious until more economic indicators turn positive, Spierkel said. "We believe we're making the right moves to navigate this recovery period successfully and create a foundation for a more prosperous future," he said.

Ingram Micro's North America sales declined 22 percent, its best performing region. Sales in the Europe, Middle East and Africa fell 32 percent compared to the year-ago quarter. Asia Pacific revenue fell 21 percent compared to the second quarter last year, and Latin America sales were down 27 percent for the same period.

Shares of Ingram Micro closed at $18.54, up 40 cents, or 2 percent, on Thursday.

Tweet

   

More Channel Programs