Tech Data Q2 Revenue Up Sequentially, Net Income Soars 59%

By Jessica Davis  |  Print this article Print


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Technology distributor Tech Data reports it saw revenues grow sequentially for its second quarter while net income grew by 59 percent year over year. CEO Bob Dutkowsky tells Channel Insider that Tech Data is selling more profitable products to the right customers.

Tech Data reported higher sequential revenues for its second-quarter and net income that soared by 59 percent year over year, marking the technology distributor's third solid quarter at a time when most technology companies have struggled amid the most trying economic conditions.

"We had a very good quarter," CEO Bob Dutkowsky tells Channel Insider. "It's safe to say we are selling more profitable products to the right customers. Our strategy is execution, diversification and innovation."

Tech Data reported second-quarter net sales of $5.2 billion, down from $6.2 billion during the same period a year ago, a 16 percent decline, but up from net sales of $5 billion in the first quarter. Tech Data reported second-quarter net income of $35.2 million, compared with $22.1 million during the same period a year ago.

By contrast, the revenues of Tech Data's larger rival, technology distributor Ingram Micro, saw a 25 percent decline year over year and a 2 percent decline sequentially when the company reported its most recent quarterly earnings at the end of July.

"We are firing on all cylinders," Dutkowsky tells Channel Insider. "And that's not a cavalier thing to say. We have to sell over $70 million of things every day."

Dutkowsky says Tech Data has added new products and new vendors and has gotten bigger in some geographies. The company has made investments in training and systems to make it easier for solution providers to do business with Tech Data.

As for the overall macroeconomic conditions, Dutkowsky says they have stabilized in the Americas, but Europe has gotten softer and remains an area of concern. But the timing of a recovery is another question entirely.

Dutkowsky says he believes that demand will return across the board when a recovery does come, and PCs may see an extra boost, pushed by deferred upgrades and the arrival of Microsoft's Windows 7 operating system.

"Our PCs at Tech Data are a little long in the tooth," Dutkowsky says. But he declined to commit as to when the company would be doing a large-scale refresh of its own client hardware. "At some point when we have confidence in the economy we will replace our PC fleet. But right now employees get a new one when their old one dies."

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

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