Ingram hits record high after warning

Results Distributor bounces back from profit shock to post net income of $73.2 million.

Ingram Micro shrugged off the profit warning it issued at the end ofe of $73.2 million. 1998 to post record revenue and a six per cent profit increase for the final quarter of its fiscal year.

The world's largest distributor reported net income of $73.2 million for the fourth quarter ended 2 January - a six per cent increase on the $69 million recorded in the same period a year ago. Revenue for the quarter was $6.2 billion, a 21 per cent increase on $5.1 billion for the same period a year earlier. The results were slightly ahead of analysts' predictions, following the warning in December that sales would fall short of expectations due to poor PC sales to large corporate resellers (PC Dealer, 6 January).

Fourth quarter sales in the US hit #3.69 billion, with #1.99 billion sales in Europe - an increase of 70 per cent. Net income in Europe was $25 million.

Jerre Stead, chief executive of Ingram Micro, said he was 'proud' of the distributor's accomplishments. 'There are few Fortune 100 companies that grew more than 33 per cent last year,' he stated.

Stead added Ingram's mission in the coming year was to continue to drive down operating expenses, which had fallen below four per cent for the first time. 'However, there is a lot of room for progress in Europe in particular,' he said. 'We have made significant investments in the Tulip plant in the Netherlands, which had a negative impact in the second half of the year. But we believe Europe is in a good position to increase operating margin.'

Looking to the future, Stead added: 'Being a global company will become increasingly important as vendors themselves realise the importance of global partnerships.'

For the fiscal year, the Californian distributor recorded net income of $245.2 million, compared with $193.6 million a year earlier. Revenue for the fiscal year was $22 billion, a 33 per cent rise over the previous year.