1. Business

Shares of Tampa Bay's biggest public company plunge 17 percent after missing earnings target

Clearwater-based Tech Data Corp. released its quarterly earnings on Thursday. Net sales and profits wer up. (Tech Data)
Published Aug. 30, 2018

Tech Data's stock price closed down almost 14 percent Thursdays, the same day the Clearwater company released second quarter earnings that failed to meet expectations.

Net sales were $8.89 billion, a 9.9 percent increase from a year earlier. Profits were up 60 percent to $75.9 million in the three months ending July 31, compared to the same period a year earlier, according to the earnings report released Thursday. Earnings per share rose from $1.24 to $1.97.

The consensus among analysts was for $2.11 a share.

MORE BUSINESS: Florida construction projects slowed by lack of enough skilled workers.

The share price was down 17 percent soon after the market opened, and then recovered to end the day at $76.26. The stock is down more than 22 percent since the start of the year.

The company was valued at $2.92 billion when the markets closed on Thursday.

CEO Rich Hume said much of the company's growth in the quarter was in its less profitable personal computers sector. Its data center business, which generally has wider profit margins, also grew, but not by as much.

"It's all about expectations," he said Thursday. "The analysts have a set of guidance out there. ... We came in at the high end of the range from a sales perspective and the lower end of the profitability range."

Clearwater-based Tech Data, Tampa Bay's largest public company by revenue, buys computer equipment from major suppliers including Apple, HP and Cisco, then ships it to IT customers through 11 logistics centers worldwide, six of them in the continental United States.

The company also announced a new initiative dubbed the Global Business Optimization Program designed to "create a more agile and cost-efficient organization that is structured for sustainable, long-term profitable growth," according to a company news release.

The program will digitize more of the distribution process so the company can drive a more "responsive, empowered and nimble work environment." The program also includes more centralization and standardization.

The program is expected save $70 million to $80 million a year.

Contact Graham Brink at Follow @GrahamBrink.

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