Tech Data First-Quarter Earnings Rose 11 Percent; Company to Leave Hungary

The provider of information technology products issued second-quarter earnings guidance that falls short of analysts' projections.

Clearwater, Fla.-based Tech Data also said it expects to either sell or close its Hungary operations by the end of the second quarter.

Tech Data wasn't immediately available to provide more information about the Hungarian operations, including how much the operations contribute to the bottom line and the reason for the sale.

For the quarter ended April 30, Tech Data reported net income of $35.1 million, or 60 cents a share, compared with $31.8 million, or 57 cents a share, a year earlier.

The recent quarter included a loss of $3.3 million related to the closure of operations in Norway.

Results for the latest quarter were at the high end of Tech Data's March forecast for earnings of $32 million to $35 million, or 55 cents to 60 cents a share, excluding charges or losses on discontinued operations.

Sales, meanwhile, plunged 16 percent, to $3.92 billion from $4.68 billion a year earlier. The company had expected sales of $3.7 billion to $3.9 billion.

The company, which has annual revenue of about $17.2 billion, saw sales drop 22 percent in the United States, 8 percent in Europe and 15 percent in the rest of the world. By segment, sales declined 25 percent at the networking unit, 15 percent at peripherals, 15 percent at software and 13 percent at its systems division.

Looking ahead, Tech Data anticipates second-quarter earnings of $31 million to $34 million, or 53 cents to 58 cents a share, excluding a loss of $2.5 million to $3 million to sell or close operations in Hungary.

The company expects sales of $3.75 billion to $3.9 billion for the period ended July 31.

Analysts currently expect earnings of 60 cents a share on revenue of $3.94 billion for the second quarter, according to a survey by Thomson Financial/First Call.

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