Especially strong European sales have buoyed Tech Data's latest results and ensured the distributor beat financial expectations.
Tech Data, parent company of Computer 2000 (C2000) in the UK, reported turnover for its first quarter ended 30 April of $4.8bn, an increase of 23.2 per cent on the $3.9bn posted in the same period last year. Profit for the period was $34.7m, compared with $21.5m for Q1 last year.
The distributor said it expects turnover for its second quarter, ending 31 July 2004, to be about $4.4bn to $4.5bn, and profit to be between $27.5m and $30.5m.
For Q1 sales in Europe grew by 35.6 per cent to $2.8bn, compared with just 9.7 per cent sales growth to $2.1bn in the US. Europe accounted for 57 per cent of sales worldwide.
Steve Raymund, chief executive of Tech Data, said: "Our European performance was especially strong, reflecting our improved execution in the region and the benefit of operating leverage on the incremental sales."
Howard Davies, senior partner at channel analyst Context, said there are several reasons for the good European results. "The fact that Tech Data is reporting in dollars means European sales will show greater growth. As the dollar is so weak, it enhances the European figures," he said.
"Also, the channel in Europe has seen a good upturn, with vendors pumping more products through it. The channel share of business in Europe is far better that the US."
Graeme Watt, president of European and Middle East operations at rival distributor Bell Microproducts, is not surprised that Europe accounts for over half of Tech Data's global sales. "It has been moving in this direction, and the acquisition of Azlan had a major impact," he said.
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