The $1.75 after-hours surge rewarded the company's returns, which easily beat second quarter expectations.
By JEFF HARRINGTON
Published August 27, 2004
Shares in Tech Data Corp. surged in after-hours trading Thursday after the Clearwater computer equipment distributor said it handily beat profit estimates in its fiscal second quarter.
"I think there have been a lot of rumors related to the broader IT (information technology) market of a possible slowdown, but we really didn't see any kind of softening demand for IT products either here in the Americas or in Europe," Tech Data chief executive Steve Raymund said in an interview late Thursday.
For the quarter ended July 31, Tech Data posted net income of $30.7-million, or 52 cents a share, exceeding the consensus Wall Street projection of 49 cents a share. A year earlier, it reported net income of $17.2-million, or 30 cents a share.
Sales rose 9.6 percent to $4.6-billion, compared to $4.2-billion in the year-ago quarter.
As the world's No. 1 computer-equipment distributor, Tech Data counted on Europe for 55 percent of sales in the quarter and the Americas for 45 percent.
Sales in Europe were up 15 percent (or 9 percent on a local currency basis) while sales in the Americas were up almost 4 percent from a year ago.
"No doubt the Americas can be described as extremely competitive, but we've been able to negotiate much tougher times," Raymund said in a conference call with analysts.
Though sales were up from 2003, they were down 5 percent from the fiscal first quarter due in part to the seasonality of European sales.
Also, Raymund said, the growth spurt of the previous two quarters was not expected to continue. "We expected growth to settle down to more sustainable and stable rates and that's precisely what we saw."
The Tech Data chief also cited healthy returns from marketing "specialized business units" which package some of the varied products it sells. In particular, Raymund said, sales have picked up for specialized units focused on digital imaging, point-of-sale data capture, software licensing and telephony equipment.
For its fiscal third quarter ending Oct. 31, Tech Data is projecting net sales of $4.65-billion to $4.8-billion with net income between $30.5-million and $33.5-million, or 52 cents to 57 cents per share.
The company's second-quarter results were released after the close of market Thursday. Its shares closed at $37.45, down 6 cents. In after-hours trading, however, Tech Data's stock surged $1.75, or nearly 5 percent, to $39.20.
