Ingram Micro warns over European softness

Distributor laments weak consumer market and botched ERP rollout as it issues Q3 profit warning

Ingram Micro has warned its Q3 profits will be hit by soft demand in Europe and disruption caused by a recent ERP rollout in Australia.

In a Q3 earnings update, the world's largest IT distributor cautioned that earnings per share for the three months to 1 October would fall between $0.32 (£0.20) and $0.34 on a non-GAAP basis.

This is below both its internal expectations and those of Wall Street. Revenue is set to hit $8.9bn, in line with expectations.

The New York-listed distributor said it had encountered margin pressure in Europe on the back of soft demand in the region, particularly in the consumer sector. It also admitted the implementation of its new global ERP system in Australia is continuing to cause it pain, with its market share recovery progressing at a slower place than anticipated.

The distributor said it also expects to record Q3 charges totalling $29m relating to its loss-making Brazilian operation.

Gregory Spierkel, chief executive of Ingram Micro, said: "Demand in our key customer segment, which serves small and medium businesses, remained relatively solid in most parts of the world.

"Most areas of our business are performing well, outside of the recovery efforts in Australia and the effects of the European economy."