Ingram Micro, Avnet Report Earnings in Wall Street Meltdown Aftermath
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Disappointing revenues, low visibility and more interest in lease financing characterized the quarter for technology distributors Ingram Micro and Avnet, reporting their earnings on Oct. 23.
"The quarter wasn't what we expected it to be," said Greg Spierkel, CEO of the world's largest technology distributor, Ingram Micro. "When we started out and put our forecast together at the beginning of July, the universe was quite different.
"Oil was $147 a barrel, and now it is $68 or $69. It's gone down by half in less than four months. And the banking community had been under pressure, but what happened in September was downright scary."
Ingram Micro reported lower revenues and lower net income for the quarter, and CEO Spierkel admitted the company had forgone deals that would not meet the profitability goals of the company.
Ingram Micro results
|
|
Current Quarter
|
Year-Ago Quarter
|
|
Revenues
|
$8,280
|
$8,610
|
|
Net income
|
$46
|
$72 |
(in millions)
Spierkel also noted that visibility into future outlooks had become increasingly murky, pointing to many technology vendors that recently widened their forecasts for upcoming quarters. Ingram Micro made the decision to stop offering guidance for future quarters and the 2009 year.
"The decision to not offer guidance comes because of the uncertainty of the market," Spierkel said. "We can't call this as well as we normally have. So let's just focus on our business rather than chase numbers."
John Paget, president of Avnet's Technology Solutions unit, which distributes information technology, agreed that the volatility of the market made forecasts more difficult.
"Visibility in today's environment is a lot tougher than it was a year ago," he said. "The stock market will go up 500 points one day, down 500 points the next day. We try to get close to our resellers and systems integrators and do the best we can, but we don't have a good long-term view."
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