Make us your home page
Instagram

Tech Data battles to keep pace with the mobile evolution

The global mobile revolution is happening so fast that it's hard for even front-line competitors like Tech Data Corp. to keep up.

The Clearwater-based IT products distributor — Tampa Bay's largest public company by revenue — missed earning targets Monday, triggering a hit to its stock price.

One of the biggest drags on profits: the company's rapid shift from distributing higher-margin products like servers to lower-margin products like tablets, mobile phones and software.

"Look across the landscape … and laptops and portable PCs are being replaced by tablets," Tech Data CEO Bob Dutkowsky said in an interview. "… It's just the reality that technology goes through these transitions. It'll just take us a couple quarters to find our level in this new world."

Overall, the company's report was mixed, with a 5 percent surge in revenue to a better-than-expected $7.5 billion, offsetting some concerns about net income. For the year, revenue was down 4 percent to $25.4 billion.

Paper profits looked better than reality. Tech Data's quarterly net income jumped 53 percent to $82.5 million, or $2.17 per share, due largely to a big tax benefit. Take away a deferred tax valuation allowance in Europe and its earnings were $1.48 per share, up from $1.29 a year ago but far short of the $1.75 per share expected on Wall Street.

It could have been worse, Dutkowsky said, if the company hadn't established strong customer relationships ahead of the mobile shift.

Four years ago, Tech Data sold virtually no tablets; in the fiscal year that just ended Jan. 31, the company notched $2 billion worth of tablet sales along with $2 billion worth of cellphones and smartphones.

To offset the low-profit mobile sales, Tech Data has been diversifying into higher-margin items like distributing a high-end IBM server and IBM storage products, both million-dollar systems.

Shares of Tech Data closed Monday at $47.80, down $4.43, or 8.5 percent.

Jeff Harrington can be reached at jharrington@tampabay.com or (727) 893-8242.

Tech Data battles to keep pace with the mobile evolution 03/04/13 [Last modified: Monday, March 4, 2013 11:16pm]
Photo reprints | Article reprints

© 2017 Tampa Bay Times

    

Join the discussion: Click to view comments, add yours

Loading...
  1. Carrollwood fitness center employs scientific protocol to help clients

    Business

    In 2005, Al Roach and Virginia Phillips, husband and wife, opened 20 Minutes to Fitness in Lakewood Ranch, and last month they opened the doors to their new location in Carrollwood.

    Preston Fisher, a personal fitness coach at 20 Minutes To Fitness, stands with an iPad while general manager/owner Angela Begin conducts an equipment demonstration. The iPad is used to track each client's information and progress. I also included one shot of just the equipment. The center recently opened in Carrollwood. Photo by Danielle Hauser.
  2. Olive Tree branches out to Wesley Chapel

    Business

    WESLEY CHAPEL — When it came time to open a second location of The Olive Tree, owners John and Donna Woelfel, decided that Wesley Chapel was the perfect place.

    The Olive Tree expands its offerings of "ultra premium?€ extra virgin olive oils (EVOO) to a second location in Wesley Chapel. Photo by Danielle Hauser.
  3. Massachusetts firm buys Tampa's Element apartment tower

    Real Estate

    TAMPA — Downtown Tampa's Element apartment tower sold this week to a Massachusetts-based real estate investment company that plans to upgrade the skyscraper's amenities and operate it long-term as a rental community.

    The Element apartment high-rise at 808 N Franklin St. in downtown Tampa has been sold to a Northland Investment Corp., a Massachusetts-based real estate investment company. JIM DAMASKE  |  Times
  4. New York town approves Legoland proposal

    News

    GOSHEN, N.Y. — New York is one step closer to a Lego dreamland. Goshen, a small town about fifty miles northwest of the Big Apple, has approved the site plan for a $500 million Legoland amusement park.

    A small New York town, Goshen approved the site plan for a $500 million Legoland amusement park. Legoland Florida is in Winter Haven. [Times file  photo]
  5. Jordan Park to get $20 million makeover and new senior housing

    Real Estate

    By WAVENEY ANN MOORE

    Times Staff Writer

    ST. PETERSBURG —The St. Petersburg Housing Authority, which bought back the troubled Jordan Park public housing complex this year, plans to spend about $20 million to improve the 237-unit property and construct a new three-story building for …

    Jordan Park, the historic public housing complex, is back in the hands of the St. Petersburg Housing Authority. The agency is working to improve the 237-unit complex. But the latest plan to build a new three-story building for seniors will mean 31 families have to find new homes. [LARA CERRI   |   Tampa Bay Times]