Tech Data's sales and profits rise in Europe

CEO Robert Dutkowsky claims first-half momentum was maintained in Q3

Tech Data's local-currency sales and profits are on the rise in Europe despite the global distributor falling short of Wall Street expectations in Q3.

Chief executive Robert Dutkowsky billed Q3 as "another solid quarter" as GAAP net profit for the three months to 31 October came in flat year on year at $45.2m (£30m) on revenues that fell five per cent to $6.8bn.

With Europe generating 60 per cent of sales, Tech Data has been worse hit than the other US-based distribution giants by the weakening of the euro against the dollar this year.

In constant currencies, and stripping out its divested Chilean, Peruvian and Uruguayan businesses, net sales actually rose five per cent.

In Europe itself, sales when converted to dollars slid six per cent to $3.9bn but rose six per cent in constant currencies.

Non-GAAP operating profit in the region inched up from $36.5m to $37.9m year on year in dollar terms but jumped an impressive 19 per cent in constant currencies.

Despite not matching analyst expectations, the results are broadly level pegging with those of arch rival Ingram Micro, which posted a six per cent fall in quarterly sales last month.

"Continuing our positive first-half momentum, I am pleased to report that Tech Data delivered another solid quarter in Q3 of fiscal 2016," said Dutkowsky.

"On a constant currency basis, we posted good top-line growth, improved non-GAAP operating income by nearly twice the rate of sales growth, and grew non-GAAP earnings per share by 19 per cent to a record Q3 level."

Tech Data said it expects Q4 sales to come in at between $7.05bn and $7.25bn.