Sunday, June 17, 2018
Business

Tech Data shares slip 6 percent amid flat sales

As a distributor of computers and electronics in 100 countries, Tech Data Corp. has its finger on the pulse for sales of tablets, PCs, big-screen TVs and software around the world.

The pulse for 2012, according to Tampa Bay's largest public company, has decidedly slowed down.

In reporting flat sales for its fiscal fourth quarter on Tuesday, Tech Data CEO Robert M. Dutkowsky cautioned sales will likely be flat this current quarter as well.

For the year, he sees the IT market growing 2 or 3 percent, far shy of the 30-year average growth of 4 to 6 percent. What that tepid growth here and abroad means, he said, is that it will be hard for the economic recovery to pick up speed.

"The American economy is stable," Dutkowsky said in an interview. Sales "are not necessarily headed downward anymore, but they're not rushing to improvement."

Tech Data's sales jumped 9 percent to $26.5 billion in the just-ended fiscal year, but that revenue surge came earlier in 2011. By the fourth quarter, the slowdown was evident, with revenue at $7.11 billion, down less than 1 percent from $7.12 billion a year ago.

Its profits in the fiscal quarter ended Jan. 31 were hit by a $28.3 million charge related to a decision to exit operations in Brazil and Colombia. As a result, net income fell 5 percent to $73.3 million, or $1.29 per share, down from $77.3 million, or $1.63 per share, a year ago.

Shares of Tech Data slumped on the news, falling 6 percent to close at $53.99 apiece.

Dutkowsky, however, stressed the bright side: Despite the slowdown, the company still ended its fiscal year with record sales and earnings per share. Moreover, it continues to seize niche opportunities. "Two years ago the iPad didn't exist; now we sell every one we can get," he said.

Ditto for products like big-screen TVs, smartphones, tablets and network software.

Dutkowsky said he doesn't plan to pull out of any more countries soon. Instead, the company may enter new markets.

In part by buying other companies, Tech Data has swelled to roughly 8,500 employees, including 1,500 in the Tampa Bay area. The Clearwater firm is the bay area's biggest public company by revenue. About 40 percent of its sales come from its Americas region (North America and Latin America) and the bulk is overseas.

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