Ingram Micro posts Q2 results

By Paul Kunert

25 July 2008

In spite of the current rocky economic climate Ingram Micro has posted its highest second quarter gross margin in ten years but said it expects tough macro-economic conditions to continue.

Revenues for the three months ended 28 June 2008 grew to $8.82bn, up from $8.19bn in the same period a year ago, profit grew to $58.9m from $52.4m. Gross margin was 5.54 per cent, an increase of 12 basis points

“Despite increasingly competitive markets, we were able to achieve the highest second quarter gross margin in a decade though pricing discipline, growth in higher-margin business units and improvement in our products mix,” said Ingram CEO Greg Spierkel.

“We continue to benefit from our decisions to diversify our profit streams through fee-for-service models and adjacent technologies, such as logistics and data capture/ point of sale,” he added.

Sales in North America grew 7 per cent to $3.52bn (40 per cent of group revenues), turnover in EMEA was up to $2.96bn (33 per cent of the business) and Asia Pacific and Latin America grew to $1.76bn and $438m respectively.  

Op-ex grew to 4.47 per cent of revenue, including $7.7m in an expense reduction programme, up from 4.36 per cent in the second quarter 2007.

“We expect the macro-economic softness to continue into the third quarter, the benefits of our cost containment and freight recovery efforts are expected to be more visible in the third quarter, improving operating leverage.” said Spierkel

“The actions we are taking today will buffer us from the weaker market and better position us when the economic environment improves,” he added.

The distributor said it was evaluating further expense reduction opportunities, beyond the current programme that is expected to save up to $24m annually.