Tech Data profits rise despite 7 percent drop in revenues

The global economic slowdown hampered Tech Data Corp.'s quarterly revenues, but the computer-products distributor still posted 6 percent higher profits than a year ago. Tech Data — which distributes everything from HP's high-end servers to a myriad of Apple technology products — said revenue for the quarter ended April 30 fell 7 percent to $5.89 billion. Analysts on average had expected $6.18 billion, according to Thomson Reuters I/B/E/S. The drop in sales was across the board, geographically speaking. Revenue from Europe fell 7 percent to $3.4 billion, while that from the United States dropped 6 percent to $2.5 billion. Net income rose to $51.7 million, or $1.24 per share, from $48.7 million, or $1.03 per share, a year ago. Analysts on average had expected earnings of $1.16 per share. CEO Robert M. Dutkowsky credited the company's diversification, flexible business model and strong operations for helping the company's bottom line "despite volatile and uncertain markets." Dutkowsky also said the revenue drop was misleading because the company has exited Brazil and Colombia, which had inflated year-ago sales. Plus, weaker foreign currencies hurt some sale comparisons, and the company changed the way it classified some sales as services. Factor those issues together, Dutkowsky said, and sales were up on a comparable basis by 2 percent in the Americas and by one percent in Europe in a year. In a typical year, he said, tech spending would rise 4 to 6 percent. Shares in Tech Data closed Monday at $47.88, up 42 cents, or about 1 percent.

Tech Data profits rise despite 7 percent drop in revenues 05/21/12 [Last modified: Tuesday, May 22, 2012 1:40pm]

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