Tech Data Corp., Tampa Bay's largest public company by revenues, missed its target for both sales and earnings in its third quarter due to accounting changes and slumping demand in the United States.
The Clearwater computer parts distributor reported net income of $45.9 million, or $1.21 per share, in the fiscal quarter ended Oct. 31. That's down 4 percent from a year ago and 11 cents shy of analysts' consensus estimates.
Net sales were $6.04 billion, down 8 percent from $6.59 billion in the prior-year period. Analysts had been anticipating about $6.2 billion.
"We continued to face weak macroeconomic environments and slowing demand, as well as challenges in our U.S. operations following the implementation of certain (accounting changes)," Tech Data CEO Robert M. Dutkowsky said. Specifically, the company changed the way it accounts for the sales of vendor warranty services and certain fulfillment contracts.
In rolling out its new software management system, some orders were delayed and customers were alienated, sparking at least a temporary loss in market share.
"You could always do something different," Dutkowsky said in an interview. "But we've installed (this system) 20 times in Europe. It works. … The learning curve is the reason we're not as productive today."
The quarter's results were also skewed by the weakening of certain foreign currencies against the U.S. dollar.
Take away the accounting changes, currency fluctuations and the exit of the Brazil and Colombia markets, and revenues would have been up 1 percent. "To be up 1 percent is basically flat," Dutkowsky said. "That says that tech spending … both in Europe and the Americas is kind of muted."
Tech Data is often viewed as a gauge for estimating consumer demand of technology, given its breadth and depth of products. Its stock fell 2 percent Tuesday.
Jeff Harrington can be reached at (727) 893-8242 or [email protected]