Ingram Micro's new CEO: there's 'signficant work' to be done

Wall Street analysts promised operational improvements.

Newly annointed Ingram Micro CEO Alain Monie has addressed Wall Street analysts in his first earnings call since taking the reins last month and promised operational improvements are on the horizon.

In a conference call with analysts, Monie said the company is in "overall solid shape" but he is well aware there are several areas in which Ingram Micro needs to improve execution.

"As I look at 2012 and the opportunities over the next several years, I realise that while many areas are operating well, there's also significant work to be done on a number of fronts to ensure we are making consistent and steady progress," Monie said.

Monie outlined three keys to Ingram Micro's growth: improved productivity from its traditional distribution business, growth of higher-margin specialty businesses, and continued investments in newer technologies including the cloud.

"I do not foresee any significant changes to our strategy. However, I want to ensure we are more forceful and resolute in its execution and increase the urgency with which we deploy our initiatives across the organisation," Monie said. "To help us achieve some of our important strategic objectives, we must successfully move forward with our [SAP] ERP implementation. I believe this is a requirement to enable our operating results to reach even greater heights."

Ingram Micro has reported ongoing problems with the global rollout of an ERP system from SAP, but appears to be getting back on track.

Monie forecast low- to mid-single-digit growth for Ingram Micro for 2012, including a flat to slightly down first quarter compared to the year-ago quarter.

"This is due to expected year-over-year declines in European revenues driven primarily by continued uncertainty surrounding the economy and expectations for a year-over-year decline in Australia's revenue contribution," Monie said.

Meanwhile, Monie said Ingram Micro is looking to hire a COO to fill his former position.

"Given the size of our business and the fact that I think over the last couple of years both configurations have been tried with and without a COO, I'm fairly convinced that we need to have that position filled," he said. "So we're working towards our preference to look internally, but we're looking at all alternatives."

Addressing Ingram Micro’s product category results for the fourth quarter, Monie said that systems, including tablets, was fairly strong.

"The tablets, I would say, is probably what was driving that segment. Most PCs were probably more in the average to the low end of the average growth," Monie said. "Our peripherals were pretty much in line with our average growth. Our software business was a bit weaker than the average. On the other hand, our networking business was fairly solid and I will call it above the average. DBL, our consumer accessories business, was very strong. Data capture/point-of-sale was very strong in North America, in Europe and in Asia, across the board."

In the fourth quarter ended Dec. 31, Ingram Micro finished with its second-highest-selling quarter ever, $US9.95 billion ($A9.22 billion), compared to $9.88 billion in the fourth quarter of 2010. The fourth quarter of 2007 was the Santa Ana, Calif.-based distributor's highest-selling quarter ever.

For the fourth quarter, Ingram Micro earned $104.9 million, or 68 cents per share, compared with earnings of $115.0 million, or 71 cents per share, in the year-ago quarter. North American sales increased 4 percent to $4.21 billion and operating margins for the region increased 50 basis points to 2.14 percent.

Europe continues to be more challenging for the company as revenue fell 4.5 percent.

"I wish I had a better crystal ball in Europe. We try and read and understand everything we can. Italy, Spain have been pretty weak for obvious reasons," Monie said. "On the other hand, our big engines, particularly Germany, France and the U.K., for us performed fairly well."

This article originally appeared at crn.com