Ingram Micro: The Recession Is Over

By Jessica Davis  |  Print this article Print

IT distribution giant Ingram Micro's revenues and net income came roaring back in the first quarter, and CEO Greg Spierkel told Channel Insider that he doesn't believe we are in recession anymore. Ingram Micro's hardware category saw the biggest growth with personal computer desktops, laptops and server sales up by over 20 percent.

IT distributor Ingram Micro’s revenues and profits came roaring back in the first quarter, with revenue growth up 20 percent year over year and net income more than doubling, signaling an end to the recession and a potential recovery.

"If you’d asked me two quarters ago, did we think we’d be looking at strong double-digit growth, I wouldn’t have been comfortable saying that," CEO Greg Spierkel told Channel Insider. "But this sector has come back really big."

Spierkel said specifically that the systems business – PCs, servers, and laptops, grew the fastest at "nicely above 20 percent." The networking business also grew at over 20 percent. Peripherals such as keyboards, monitors and mice grew just below the company average, and software was "the quietest but still had major growth characteristics."

Spierkel said that Ingram Micro’s impressive  first quarter comeback came from a combination of the overall improvement in the technology industry together with some initiatives the company put together in the second half of last year to improve relationships with vendors and channel partners.

Ingram Micro reported first quarter worldwide sales of $8.1 billion compared with $6.75 billion during the same period a year ago. The company noted that the translation of relatively stronger foreign currencies had a positive effect of about 6 percentage points.

Net income grew to $70.3 million or 42 cents per diluted share, which included a one-time gain of $1.7 million or 1 cent per diluted share. That compares to $27.5 million or 17 cents per diluted share for the same period a year ago, which included on-time costs of $14.2 million or 6 cents per diluted share.

"I don’t think there’s a recession on anymore, at least for the U.S. and most of Asia…The R word is history," said Spierkel. And while there are still issues with the housing markets and high unemployment rates "…we’ve seen the worse and it will start getting better, unless there’s another shock to the system."  The financial crisis in Greece and Portugal is of concern, Spierkel said. "But the probability of that being a major factor going forward seems small."

Ingram Micro did not offer specific second quarter guidance, but said it expected continued strong year-over-year growth and noted that the second quarter is generally software than the first, "with history pointing to a mild, single-digit sequential decline."


Jessica Davis covers the channel for eWeek and Channel Insider. Her technology journalism career began well before anyone heard of the World Wide Web and has included stints at Infoworld, Electronic News/EDN, and the Philadelphia Business Journal. Her work has also appeared on CNN and Forbes.com. She has covered hardware, software and networking, as well as the business side of technology. She has won several journalism awards, including a national ASBPE award for best staff-written column, and was named Marketing Computers hardest working tech journalist on their inaugural list of top tech journalists. Jessica can be reached at jessica.davis@ziffdavisenterprise.com