Sales surge but profits pinched for ScanSource in Q2

Big sales hike outside the US boosts comms and barcoding distie's turnover, but operating margins fall almost one point annually

Sales outside its US homeland helped distributor ScanSource post a robust revenue rise in its second fiscal quarter, although the distributor endured a drop in margins.

For the three months to the end of December, the Epos and comms distributor saw turnover rise 14.5 per cent year on year to $782.7m (£499.3m). Sales in North America grew 7.7 per cent to $562.9m, while international revenue spiked 36.7 per cent annually at $219.8m.

ScanSource runs operations in Germany, France, the UK, Italy, Belgium and the Netherlands, as well as Colombia, Mexico and Brazil.

Despite the distributor's sales growth in Q2, global operating profit for the quarter fell 4.3 per cent on the corresponding period last year to $32.1m. This equates to a decline in operating margins from 4.9 to 4.1 per cent.

The South Carolina-based firm is expecting third-quarter sales and profitability to fall on a sequential basis. Revenue is projected to fall between $700m and $720m, while earnings per share is forecast in the $0.52 to $0.55 range, down from $0.77 in Q2.

ScanSource chief executive Mike Baur said: "Our excellent quarterly results were led by record sales in each of our POS/barcoding business units in all geographies. In addition, we achieved record sales results in our ScanSource Communications business unit in North America."