Join        Login             Stock Quote

Tech Data (TECD) 3Q Earnings Drop 14.2 Pct, Miss Estimates

 November 20, 2012 07:20 AM

(By Balaseshan) Tech Data Corp. (NASDAQ: TECD), a wholesale distributor of technology products, reported a 14.2% drop in quarterly earnings due to the impact on gross margin of product mix, customer mix and competitive pricing pressure. Results missed Street's expectations.

Earnings for the third quarter were $45.9 million or $1.21 per share, down from $53.5 million or $1.26 per share last year.

Sales declined 8% to $6.04 billion due to the negatively impact of the weakening of certain foreign currencies against the U.S. dollar. Excluding the impact of certain factors, net sales increased by about 1%.

Analysts, on average, polled by Thomson Reuters had expected a profit of $1.33 per share on revenue of $6.20 billion for the third quarter.

[Related -Stocks End Higher On Earnings, Cyprus Hopes; Apple (AAPL) Gains]

Net sales in the Americas fell 15% to $2.37 billion, due to change in presentation of vendor warranty services and certain fulfillment contracts. Excluding the impact of certain factors, as well as the translation effect of certain foreign currencies, the Americas' net sales decreased by about 10%.

Net sales in Europe decreased 4% to $3.67 billion, due to change in presentation of vendor warranty services and certain fulfillment contracts. Excluding the impact of this change, Europe's net sales declined by about 1% (8% increase on a euro basis).

Gross margin declined to 5.10% from 5.23%, due to competitive pricing, product mix and certain vendor programs in both regions, as well as the implementation of certain SAP modules in the U.S. during the quarter.

[Related -Futures Rise On Strong Earnings Reports; Nike (NKE) Jumps]

Looking ahead into the fourth quarter, the company expects sales growth of low single-digit, in euros, in Europe, and a low double-digits year-over-year sales decline in the Americas. The year-over-year comparisons are impacted by the fiscal 2013 change in presentation of vendor warranty services and certain fulfillment contracts, the exit of Brazil and Colombia at the end of fiscal 2012, and general market conditions.

The company expects sequential improvement in gross and operating margins and estimates the average U.S. dollar to euro currency exchange rate to be $1.28 to 1.00 euro for the fourth quarter of fiscal 2013.

TECD closed Monday's regular session up 4.04% at $45.46. The stock has been trading between $42.25 and $59.29 for the past 52 weeks.

iOnTheMarket Premium


Post Comment -- Login is required to post message
Alert for new comments:
Your email:
Your Website:

rss feed

Latest Stories

article imageOld Bank's New Breakout has Big Rally Potential

One of my favorite things to see in a long candidate is a pattern of beating Wall Street's earnings read on...

article imageIs The Stock Market's 5-Year Return A Useful Proxy For Valuation?

Tobin’s Q, a market-valuation metric, is back in the news, in part thanks to a widely read Bloomberg read on...

article image4 Dogs To Sell Immediately

Despite the chorus of analysts and investors calling for the long-awaited correction, the market is showing read on...

article imageThe Fed's Magical Mystery Tour

What's going on at the Fed? Notorious dove, Charles Evans of the Chicago Fed, gave a speech in read on...

Popular Articles

Daily Sector Scan
Partner Center

Fundamental data is provided by Zacks Investment Research, and Commentary, news and Press Releases provided by YellowBrix and Quotemedia.
All information provided "as is" for informational purposes only, not intended for trading purposes or advice. iStockAnalyst.com is not an investment adviser and does not provide, endorse or review any information or data contained herein.
The blog articles are opinions by respective blogger. By using this site you are agreeing to terms and conditions posted on respective bloggers' website.
The postings/comments on the site may or may not be from reliable sources. Neither iStockAnalyst nor any of its independent providers is liable for any informational errors, incompleteness, or delays, or for any actions taken in reliance on information contained herein. You are solely responsible for the investment decisions made by you and the consequences resulting therefrom. By accessing the iStockAnalyst.com site, you agree not to redistribute the information found therein.
The sector scan is based on 15-30 minutes delayed data. The Pattern scan is based on EOD data.