Tech Data Beats Expectations, Despite Declining Profits

Distributor plans to exit Norway, possibly one other country

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Tech Data beat analysts' expectations for its fourth quarter ended Jan. 31, but saw earnings fall 32 percent.

The Clearwater, Fla.-based distributor earned $36.5 million, or 63 cents per diluted share, in its fourth quarter, compared with $52.7 million, or 92 cents per diluted share, in the year-ago quarter. First Call had projected earnings of 61 cents per share.

Sales were down 22 percent to $4.16 billion, compared with $5.32 billion for the same period last year.

"We are very proud of what we are able to accomplish in this extraordinarily difficult business environment," said Steve Raymund, Tech Data chairman and CEO, in a statement. "We proficiently managed our costs and put ourselves in a position to generate solid results in the current demand environment."

Tech Data expects first-quarter revenue, excluding charges, to be between $3.7 billion and $3.9 billion, with net income between $32 million and $35 million, or 55 cents to 60 cents per diluted share. First Call had been projecting earnings of 58 cents per share for the first quarter.

Tech Data plans to sell or close operations in Norway and potentially one other country during the first half of this year, according to executives. The action will result in a charge between $6 million and $9 million.

Sales fell 29 percent in the United States in the fourth quarter, 12 percent in Europe and 23 percent in the rest of the world.

Among product categories, software sales fared best with an 8 percent decline. Peripherals fell 18 percent, systems 26 percent and networking equipment 35 percent.

Peripherals accounted for 47 percent of sales, systems 25 percent, software 14 percent and networking items 14 percent.

For the 2002 fiscal year, Tech Data earned $110.8 million, or $1.98 per share, compared with $178 million, or $3.14 per share, in fiscal 2001. Revenue in fiscal 2002 was $17.2 billion, compared with $20.43 billion in fiscal 2001.

Tech Data shares were trading at $44.46 Thursday morning, up $1.20 per share, or 3 percent.


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