Channel is optimistic in face of poor results

Sluggish IT market conditions continue to hamper industry recovery

Sluggish IT market conditions continue to hamper industry recovery, as revealed by three major channel players' latest financial results.

Distributor Ingram Micro posted turnover of $5.4bn (£3.3bn) for its first quarter ended 29 March, a decline of 2.5 per cent compared with $5.6bn the previous year.

Profit for the quarter stood at $10.1m, compared with Q1 2002, when a $15.5m profit fell to a loss of $265.4m after goodwill write-offs and the adoption of a new accounting standard.

Kent Foster, chief executive of Ingram Micro, said: "Despite slightly lower sales compared with last year, we've made substantial improvements in our earnings and operating income."

Similarly, online reseller Insight's UK division reported a 14 per cent fall in Q1 2003 turnover, which stood at $94.4m, compared with $110.2m in Q1 2002. Its profit was $3m.

Timothy Crown, chief executive of Insight, blamed a weakened IT spending environment, offset by exchange rate increases in the UK.

"Although sales are down from Q1 last year, we are pleased that Insight UK is building sales momentum," he said.

"I am confident we now have a strong management team that is building a strategy and culture that will facilitate continued earnings from operations."

Finally, corporate reseller Morse blamed six weeks of weak sales for its Q3 2002 results. The firm reported turnover of £80m for the quarter ended 31 March, compared with £127m last year.

Service revenues in the year-on-year period decreased from £27m to £25m.Duncan McIntyre, chief executive of Morse, said: "There is still no clear pattern to demand but the outlook for our final quarter is more positive."