Ingram Micro reveals Q2 figures

By Scott Campbell, on Jul 30, 2012 8:03 AM
Filed under Services

Driven by enterprise tech.

Ingram Micro performed above analysts' expectations in its second quarter despite what CEO Alain Monie called a "challenging macroeconomic and selling environment" globally.

The distributor earned $US61.3 million, or 40 cents per diluted share, on $US8.78 billion in sales for the quarter. The numbers compare to $US59.7 million in net income, or 37 cents per diluted share, on $US8.75 billion in sales in the year-ago quarter.

Asia-Pacific sales increased 4 percent, surpassing $US2 billion.

"I'm pleased with our performance in what continues to be a challenging macroeconomic and selling environment throughout much of the world," said Ingram Micro President and CEO Alain Monie on a conference call with analysts.

A consensus of Wall Street estimates expected earnings of 38 cents per share on sales of $US3.74 billion.

Ingram Micro's results were boosted by its North America operation, with double-digit percentage growth in DBL electronics accessories, data capture/point-of-sale and physical security solutions, as well as "solid sales increases" in enterprise technology, attributing to 2 percent growth in sales.

Its European operation didn't perform so well, with revenue coming in at $US2.46 billion, down from $2.64 billion in the second quarter last year. 

William Humes, CFO of Ingram Micro, said pricing pressure has impacted performance and likely will continue to do so in the third quarter.

"Going forward in at least in Q3, we believe it's relatively constant in the sense of the margin impact of both pressure and mix. So not further worsening from where we're at today in this second quarter," Humes said.

Humes added that the pricing pressure is "in pockets" but he did not elaborate on where the pockets were. "It probably got a little bit more aggressive in certain areas. But in other pockets, it was pretty stable.

"Overall, I think, the majority of the impact really comes from the mix and volume of the business, the type of business. And then there's probably some pockets in Europe and Asia that may be a little bit more competitive, but not tremendously so from Q1," Humes said.

As far as products, tablets continue to be a steadily growing area with no constrained supplies, Monie said.

"That's been one of the drivers in growth in many of our geographies. As far as the segments, we don't have an analysis on whether there are major shifts there. But it's obviously, both enterprise and education are becoming much more solid markets for the tablets, and we're seeing that as well," he said.

Meanwhile, Ingram Micro expects to see solid financial performance from its recent acquisition of mobility specialist BrightPoint, Humes said.

"Given the profitability and the performance of BrightPoint alone, they're already a very well-performing business unit. But combined with us and then driving some of the synergies we talked about, I would say there are opportunities for cost synergies. But there's also opportunities for volume and revenue," Humes said.

"There's probably some low-hanging fruit to start with, and then there's some longer-term service capability revenues and fees and margins that we can capitalise on. But that will take a little bit more time."

Ingram Micro shares were trading at $US15.25 Friday morning, down 18 cents, or 1 percent.

This article originally appeared at

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