Ingram Micro (NYSE:IM) is set to report its earnings on Feb 18. The world's largest technology distributor yes, but it is to be seen how severe the blow is and see if they survive the storm. The company faced a rating downgrade from Fitch in December. Fitch has revised Ingram Micro Inc.'s (Ingram Micro) Rating Outlook to Negative from Stable and affirmed the following ratings:

--Issuer Default Rating (IDR) at 'BBB-';

--$275 million senior unsecured credit facility 'BBB-'; and

--$250 million senior unsecured term loan facility 'BBB-'.

Fitch thinks that sales declines could be materially larger than the 3.8% year-over-year decline Ingram Micro experienced in the quarter ended Sept. 30, 2008, as demand trends in the small-to-medium business (SMB) space will likely weaken in 2009, compounded by reduced access to credit and increased receivable write-offs.

During the quarter, the company has acquired two businesses - Eurequat SA, based in France, and German-based Intertrade A.F. AG. The company aims to broaden its foothold in the European data capture and point-of-sale (DC/POS) market with this acquisition. Both Eurequat and Intertrade are leading distributors of DC/POS products in Europe, with aggregate revenues of approximately $90 million in 2007. Eurequat's customer base spans France, Spain, Portugal, Germany and Algeria, while Intertrade serves Germany, Switzerland, Austria and Israel. The companies will be integrated into the Ingram Micro EMEA Data Capture/POS Division which, together with the acquisitions of Paradigm Distribution Ltd. (UK and Ireland) earlier this year and SymTech Nordic AS (Norway, Sweden and Denmark) in 2006, will now serve resellers in 16 countries. Ingram Micro is the only global distributor of DC/POS products, entering the market in 2004 with the acquisition of Nimax of San Diego, Calif., and complementing its worldwide presence with the purchase of Beijing-based Cantechs Group, one of China's largest DC/POS distributors, in June 2008.

In terms of corporate changes, the company appointed Lisa Locklear to senior vice president and chief financial officer, North America. In terms of product agreements, Ingram expanded its alliance with BroadSign International Inc., a leading worldwide provider of Software-as-a-Service (SaaS) for managing digital signage networks, to deliver the IT channel's first digital signage deployment kits supported by ongoing managed services.

In mid-December the company used some innovative methods to retain its staff. A company spokesperson confirmed that Ingram Micro is implementing a four-day "Winter Break" for most employees in its Santa Ana, Calif., and Buffalo, N.Y. offices. Those offices will not close and will stay open to handle customer service and sales calls.

In terms of new business, Affiliated Computer Services expanded its relationship with Ingram Micro with a renewed five-year contract for outsourced information technology services. Since 2002, ACS has been providing a broad range of IT application and technology infrastructure services to Ingram Micro, the world's largest technology distributor. "Our partnership with ACS has enabled us to focus on Ingram Micro's core business and achieve cost savings in our IT operations by taking advantage of ACS' best practices, technical expertise and global delivery capabilities," said Sean C. Barker, vice president, Global IT Operations, Ingram Micro Inc. "ACS has supported our business growth by providing services while being flexible and responsive to our business priorities. ACS understands our business and is a truly valued partner."

On the whole the margins of the company would remain challenged as it has traditionally been so, but awaiting to hear the company’s strategy to stay through this rough period.

Earnings Estimates
Current Estimates: $0.37
Number of Estimates: 7
High Estimate: $0.44
Low Estimate: $0.28
Last Year EPS: $0.64
Percentage Growth: -43.00 %

Disclosure: The author does not own any of the stocks mentioned above.