Distributor Earnings Season: Ingram, ScanSource Report

Distributors Ingram Micro and ScanSource beat and met Wall Street earnings expectations, respectively, for the March-end quarter, but both companies fell just shy of analysts' revenue projections in financial reports issued after the market closed on Thursday.

Earlier in the day, Avnet also reported revenue that was slightly below expectations.

Ingram Micro reported earnings of $90.0 million, or 58 cents per share, on sales of $8.64 billion in the quarter ended March 31. The results compared to earnings of $56.3 million, or 34 cents per share, on $8.72 billion in revenue in the year-ago quarter.

The results include a one-time net tax benefit of 18 cents per share, a loss of 1-cent per share due to the departure of former CEO Greg Spierkel and a 2-cent per share loss due to foreign currency translation, according to the company.

Analysts had expected earnings of 39 cents per share, excluding special charges and benefits, on sales of $8.68 billion in the quarter.

The year-over-year revenue decline was largely due to foreign currency translation, which had a negative 1 percent impact on sales, according to Ingram Micro.

Sales in North America increased 3 percent compared to the same quarter last year, driven partially by favorable hard drive pricing and double-digit sales growth in the company's specialty business units and fee-for-service logistics.

"We continued the positive momentum with which we exited 2011, delivering solid first quarter results highlighted by improved profitability and strong sales in our higher margin businesses," said Alain Monie, president and CEO, in a statement. "We opened the year well and we are beginning to reap the rewards from our efforts on many fronts."

For the current quarter, Ingram Micro expects sales to be flat to slightly increased, while gross margins will trend down sequentially due to more normal hard drive pricing, according to the company.

Analysts are expecting earnings of 40 cents per share on $8.74 billion in sales for the current quarter.

Meanwhile for ScanSource, analysts had been expecting earnings of 54 cents per share on sales of $709.5 million.

Next: ScanSource Barcode, Security Units Strong

ScanSource reported net income of $14.8 million, or 54 cents per share, on $707.9 million in sales for its third fiscal quarter. The results compared to earnings of $16.5 million, or 61 cents per share, on $613.5 million in sales in the year-ago quarter.

"Results for the quarter were in line with our expectations, with strong performance in our North America Barcode and Security units offsetting weak results in our International businesses,’ said Mike Baur, ScanSource CEO, in a statement. "Each of our North American business units had double-digit sales growth, while our International segment, excluding the addition of our acquisition in Brazil, had a single-digit decline over prior year’s sales."

For the current quarter, ScanSource expects earnings between 60 cents and 64 cents per share and sales between $780 million and $800 million. A consensus of analysts' opinions expects earnings of 71 cents per share on $791.1 million in revenue.

Ingram Micro shares closed at $19.50, up 18 cents or 1 percent on Thursday. ScanSource shares closed at $34.14, up 35 cents or 1 percent.