Light Rain77° WeatherLight Rain77° Weather

Tech Data rides strong European sales to record quarter

Bob Dutkowsky doesn't buy into the common description of his $24 billion operation as a bellwether for where tech sales are headed.

"We're more like a thermometer" measuring current demand for computers and other electronic products around the world, said Dutkowsky, chief executive of Clearwater-based Tech Data Corp.

By that measure, fears of a double-dip recession in the United States or Europe appear overblown.

The global computer parts distributor, Tampa Bay's largest public company by revenue, beat Wall Street expectations in posting a 23 percent surge in net income in its fiscal quarter ended July 31.

Net income reached a quarterly record of $50.1 million, or $1.10 per share, compared with year-ago earnings of $40.9 million, or 82 cents per share. Revenue totaled $6.45 billion, up 18 percent from $5.47 billion in the same period last year.

The results beat analysts' consensus estimate of $6.13 billion, or 96 cents per share.

Separately, Tech Data announced that it planned another stock buyback for $100 million on the heels of completing a $200 million stock buyback. Neither report, however, was enough to overcome Thursday's widespread selloff in the markets. Shares in Tech Data closed at $41.46, down $1.05, more than 2 percent.

The company, operating in more than 100 countries, posted a 30 percent sales jump to $3.75 billion in Europe, with results aided by currency conversions. Sales in North America and Latin America rose 4 percent to $2.7 billion.

Dutkowsky credited strong execution in overcoming "global macroeconomic uncertainty and volatile markets."

Other tech distributors, such as Synnex Corp. and Arrow Electronics, have forecast lower earnings than expected. Tech Data, which distributes products made by Cisco, Apple, Hewlett-Packard and others, is different because of its geographic diversity and product mix, Dutkowsky said.

Key to the performance: picking the right spots and "having the flexibility to change with tech-buying habits," he said.

Sales of mobile products, for instance, grew 64 percent year over year with cell phones and tablets, in particular, driving sales. One of the fastest-moving products in Tech Data's distribution pipeline is the relatively new iPad. Laptops, desktops and servers also were strong.

Geographically, sales in economically troubled European markets like Spain, Portugal and Italy declined in the double digits. But that was offset by strong growth in Germany, France and the United Kingdom, the company said.

Looking ahead, Tech Data said a tax investigation at its Brazil unit could hurt future financial results.

Nevertheless, it forecast single-digit organic sales growth in the third quarter in both the Americas and Europe along with double-digit growth in earnings.

Tech Data rides strong European sales to record quarter 08/18/11 [Last modified: Thursday, August 18, 2011 10:03pm]

© 2014 Tampa Bay Times

    

Join the discussion: Click to view comments, add yours

Loading...