Tech Data Sees 3Q Sales Rise, Profit Decline
The Clearwater, Fla.-based distributor said revenue for the quarter ended Oct. 31 came in at $5.43 billion, up from $5.07 billion a year earlier. The company reported a quarterly profit of $9.6 million, or 18 cents per diluted share, including restructuring and other charges, compared with $23 million, or 40 cents per share, after charges a year ago.
The latest quarterly earnings include $6.1 million in restructuring charges and $2.8 million in consulting costs related to Tech Data's restructuring program in its Europe, Middle East and Africa (EMEA) operations. Excluding the charges, the distributor would have earned $18 million, or 33 cents per share. Analysts had forecast a profit of 22 cents per share, excluding charges, according to Thomson Financial/First Call.
The results marked the first earnings report for Tech Data's new CEO, Bob Dutkowsky, who succeeded Steve Raymund in that position on Oct. 1.
"The third-quarter results exceeded our expectations, driven by revenue growth in EMEA and solid performance in the Americas," Dutkowsky said in a statement. "The conclusion of our EMEA restructuring program will allow us to focus more intently on new opportunities with our business partners and customers."
Since initiating the EMEA restructuring program in May 2005, Tech Data has recorded $54.7 million in charges.
Third-quarter sales in the Americas were $2.6 billion, a 5.8 percent year-over-year gain. EMEA sales came in at $2.83 billion, up 8.2 percent.
Through the first three fiscal quarters, sales totaled $15.3 billion, a 2.5 percent increase from $15 billion a year earlier. Americas sales rose 5.4 percent to $7.4 billion during that time, and EMEA sales were essentially flat at $7.9 billion.
Tech Data projects sales of $5.75 billion to $5.9 billion for the fiscal fourth quarter ending Jan. 31, 2007, but the company didn't offer earnings guidance for the period.
"With respect to net income and net income per diluted share, the company does not believe it would be appropriate to provide specific guidance due to the complexity of the factors impacting the performance in our EMEA region," according to Tech Data.
Analysts forecast Tech Data's fourth-quarter earnings at 53 cents per share before charges on revenue of $5.67 billion, according to Thomson Financial/First Call.