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Robert Trigaux

Tech Data Corp: Market cap doubles this year as company sees more IT "signs of life"



BobDutkowskyceotechdata2008josephgarnett Wake up and good morning. Three months' performance does not translate to a financial trend but let's give some credit to Tech Data Corp.'s strong performance in the latest recession-challenged quarter. Granted, comparing current performance to last fall is like saying I have the flu now but at least I'm out of last year's ICU ward. Still, kudos to Tech Data, Tampa Bay's largest public company by revenue -- coming right on the heels of its 35th anniversary.

Here is the company's release about its latest financial performance and an AP story summarizing how the business did. The distributor of technology products, ranging from software to printers, earned $43.1 million, or 84 cents per share, compared to $16.8 million, or 33 cents, in the year-ago period -- despite an 8 percent drop in quarterly sales. Said CEO Bob Dutkowsky (in photo):

"We also saw our market capitalization more than double in the first nine months of the fiscal year. It is safe to say that Tech Data is having a good year in a tough environment."

What we're focused on here, though, are a few of the bigger-picture observations of Tech Data and Dutkowsky in remarks made Monday during a conference call with analysts. Here is the full transcript of that conference call and here are the highlights:

1) Tech demand shows signs of life: "While inconsistent across the industry," Dutkowsky told analysts, "it is clear that overall IT spending is beginning to show signs of improving outlook for the first time in four quarters."

2) Rise of healthcare tech demand: Dutkowsky says customers and vendors are turning to Tech Data to assist them in growing their businesses in specific verticals and segments. Healthcare is a hot segment and Tech Data this month launched a healthcare specialized business unit to help customers "capitalize on the rising demand for IT solutions in the healthcare industry." Forecasts show the healthcare vertical to be a key driver for technology spend in 2010 as government funded healthcare organizations increase budgets and incentives targeted at the modernization of medical record systems.

3) What's ahead for Windows 7: Since its launch in October, Tech Data's seen "good interest" in Windows 7 but the company does not expect a significant impact from the new Microsoft software system in calendar year 2009. "If overall IT demand picks up as we enter 2010, and the long awaited PC refresh (meaning people will buy new PCs because they held off buying Windows Vista) begins, we expect to see more widespread deployment of the Windows 7 platform," Dutkowsky says.

4) Watching new market opportunities:Which ones? According to Dutkowsky, digital signage and TVs.

(Photo: Tech Data Bob Dutkowsky by Joseph Garnett of the St. Petersburg Times.)

-- Robert Trigaux, Times Business Columnist

[Last modified: Tuesday, June 1, 2010 11:26am]


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