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Ingram steps cautiously into 2008

Broadliner posts solid 2007 year end results, but hints at belt tightening in 2008 as credit crunch hovers

Written by Sara Yirrell

CRN, 14 Feb 2008

Distribution giant Ingram Micro is erring on the side of caution with predictions for its first quarter 2008, after posting solid year end and Q4 2007 results.

Turnover for 2007 rocketed by 12 per cent for the year to $35bn, with net profit increasing to $446.4m for the 12-months compared to $422.4m in 2006. For the quarter turnover stood at $10bn, up 13 per cent from the £8.8bn in 2006. Profit for the quarter stood at $114.1m, compared to $91.7m the previous year.

Europe also put in a strong performance for the quarter with a 16 per cent increase in turnover to $3.75bn compared to $3.23bn a year ago.

Greg Spierkel, chief executive of Ingram said: “Our record sales and net income results were driven by operational improvements and long-term strategic investments in our four market-leading regional operations.”

William Humes, chief financial officer at Ingram, said: “While I’m proud that we surpassed the $10bn mark in quarterly sales and broke another annual sales record, the profitability of our regions – all exceeding operating margins of 170 basis points for the first time – is a greater achievement. Turnover and profit out-performed our guidance range, due in large part to our overall achievement in Asia-Pacific and operating income growth in EMEA.”

However the distributor revealed it is taking into account the possibility of a recession in 2008 by ‘tightly managing’ future expenses.

The broadliner is predicting a turnover of between $8.75bn and $9bn for the quarter, with profit standing at between $63m to $71m.

Spierkel said: “We believe our outlook is solid in light of concerns about the worldwide economic environment. We are experiencing some softness in Europe and North America, which is reflected in our guidance, but Asia-Pacific and Latin America remain strong. Our strategic investments are an advantage in this environment by providing geographic, market-segment and business-model diversity.
“Our focus during the quarter will be on tightly managing expenses while continuing to cultivate areas that will drive growth. I’m confident that our team will continue to perform, as we have proven our ability to excel in challenging markets. I look forward to our future success.”