Ingram Micro Q1 Profit Halves, Results Miss View; Affirms 2014 Outlook

(RTTNews) - IT products distributor Ingram Micro Inc. (IM) on Wednesday reported a profit for the first quarter that halved from the prior year, as higher reorganization costs more than offset a slight increase in sales as well as improved gross margins.

Both revenue and adjusted earnings per share for the quarter missed analysts' estimates. Looking ahead to fiscal 2014, the company affirmed its outlook for revenue growth. Shares of the company declined more than 3 percent in extended trades.

Ingram Micro is the world's largest wholesale technology distributor and a provider of supply-chain and mobile device lifecycle services.

Santa Ana, California-based Ingram Micro's first-quarter net earnings were $24.83 million or $0.16 per share down from $49.76 million or $0.32 per share in the same period last year.

The latest quarter's results include reorganization, integration and transition costs of $0.24 per share, while the prior-year quarter's results include reorganization, integration and transition costs of $0.06 per share.

Excluding items, adjusted earnings for the quarter were $67.9 million or $0.43 per share, compared with $63.1 million or $0.41 per share a year ago. On average, ten analysts polled by Thomson Reuters expected the company to report earnings of $0.48 per share for the quarter. Analysts' estimates typically exclude special items.

Net sales for the quarter edged up 1 percent to $10.38 billion from $10.26 billion in the prior-year period. Analysts had a consensus revenue estimate of $10.42 billion for the quarter.

The company said growth in Europe and Latin America was partly offset by lower handset sales in its new mobility business in Indonesia.

Gross margin for the quarter improved to 5.88 percent from 5.70 percent in the year-ago period, while operating margin fell to 0.66 percent from 0.88 percent.

Looking ahead to the second quarter, Ingram Micro expects worldwide revenue to increase year-over-year in the low- to mid-single digits, with gross margin improving over the year-ago quarter by mid-single-digit basis points. Analysts expect revenue growth of 2.4 percent to $10.56 billion.

For fiscal 2014, Ingram Micro affirmed its outlook for worldwide revenue to grow in the low- to mid- single-digits, in-line with overall global IT spending. Analysts expect a 3.4 percent increase in revenues to $43.98 billion.

IM closed Wednesday's regular trading at $30.27, down $0.51 or 1.66 percent on a volume of 1.76 million shares on the NYSE. In after hours, the stock further declined $1.02 or 3.37 percent to $29.25.