Ingram Micro "back in the game" after record Q2

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Ingram Micro "back in the game" after record Q2

Microscope contributor

Ingram Micro is "back in the game" according to its CEO after hitting the highest Q2 profits in its history helped along by an IT industry refresh, taking market share from smaller rivals and cost cutting activities implemented during the recession.

Profits posted by the broadline behemoth more than doubled to $67.7m (£43.4m) compared to $25m a year earlier as sales went up 24% to $8.1bn (£5.1bn), the best for 11 years albeit off the back of the worst recession on record.

"Building on our strong start in 2010, the second quarter was outstanding by virtually all accounts," said Ingram CEO Greg Spierkel, adding that it "continued to reap the benefits of our cost reduction initiatives of the last two years."

Operating expenses fell 3.5% year-on-year to $332.9m and return on working capital was 12%.

Sales in North America were up 29% to $3.55bn, EMEA grew 17% to $2.37bn, Asia Pacific rose 24% to $1.8bn and Latin America pushed up revenues 11% to $359m.

Spierkel said the mood in Europe was buoyant and in spite of negative talk about GDP rates there was a "bigger phenomenon...that's got everything to do with refresh and that's still playing itself through the marketplace".

He said Ingram grew a "little faster" than the overall market and took share from smaller rivals that lacked economies of scale to be as aggressive on price.

"I believe there are some smaller players that are not as competitive and I think the vendors are making some choices around where they place their bets, and I think we're in a good position to continue seeing some positive dynamics," he said.

"The vendors and the customers are feeling that we're back in the game, particularly in Europe, where we were less so a year or a year and a half ago...and now we're seeing some traction and momentum," Spierkel added.

The long awaited refresh activity "will start to taper down" in the subsequent quarters, said Ingram's boss, and he forecast sequentially flat Q3 revenues.


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