Diverse results for distributors

Ingram Micro and Tech Data report very different financials

The UK’s two largest distributors Ingram Micro and Tech Data revealed very different results for their second fiscal quarters last week.

While Ingram revealed a 20 per cent increase in turnover to $6.84bn compared to $5.72bn in the same period a year ago and profit of $41.7m, Tech Data cut its earnings expectations, blaming “challenges in Europe”.

Tech Data said it expects Q2 turnover to be between $4.8bn and $4.82bn, compared to $4.6bn in Q2 2004. Despite this upturn in sales the distributor said it expects profit to be between $12.5m and $16.5m. Tech Data had previously expected profits for Q2 to be between $24m and $27m. The firm said that the decline was primarily due to lower-than-expected gross margin, mainly in EMEA.

“While our Americas region continues to do well, challenges in our European operations have impacted expectations,” said Steve Raymund, chief executive of Tech Data.

However, Hans Koppen, president of Ingram Micro Europe, said the region had been strong with the UK outperforming all other countries. “Europe contributed 15 per cent to overall growth, but the UK was above average. One of the most important things in distribution is execution and we have been executing very well.”

Koppen said the firm is still focusing on consumer electronics. “We are still taking market share and it is more our competitors that are being affected by the slowdown,” he said.