Despite worse-than-expected market conditions in both Europe and the United States, Tech Data Corp. posted higher sales and record profits in its fiscal third quarter.
The Clearwater-based computer parts distributor, Tampa Bay's biggest public company by revenue, reported Monday that sales for the quarter ended Oct. 31 rose 7 percent to $6.59 billion, with better results in both the Americas and Europe. The strengthening of certain foreign currencies against the dollar gave a boost to results by approximately 3 percentage points.
Its net income increased to $53.5 million, or $1.26 per share, compared to $50.5 million, or $1.07 per share, in the year-ago period.
Tech Data CEO Robert Dutkowsky gave kudos to his teams in the United States and overseas for navigating "a moderating demand environment."
The results fells shy of analysts' expectations of $1.27 per share net income on revenues of $6.74 billion, according to a Thomson Reuters forecast. But Dutkowsky was undaunted, saying it's hard to be disappointed when his company has its best quarterly profits in its 37-year history and the 12th quarter in a row of double-digit earnings growth.
"Clearly the IT spending has slowed down even faster than what Wall Street analysts thought," he said in an interview. "We can only grow as fast as IT spending grows."
To offset sluggish conditions in Europe overall and restrained consumer demand worldwide, Tech Data has been selective in pursuing pockets of sales strength.
"People may not be updating their PCs or buying new video games or replacing their big-screen TVs," Dutkowsky said. But "people continue to buy smartphones and cellphones at record rates. (They) continue to buy tablets and notebooks. … It's not all doom and gloom is the point."
It's a similar story in corporate spending, he said. Sales of peripheries like printers and displays are down, but companies are investing more in tablets, cellphones and software that expands the life of their existing computer system.
Looking ahead, Tech Data projected flat to low single-digit sales growth in the fourth quarter, not including the affect of currency fluctuations.
Amid a broader sell-off in the market Monday, shares in Tech Data closed at $47.48, down 42 cents or about 1 percent.