Technology Distributor Ingram Micro's Sales Slide

By Jessica Davis  |  Posted 2009-04-30 Email Print this article Print
 
 
 
 
 
 
 

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While sales slid more than 20 percent for the world's largest technology distributor Ingram Micro in Q1, CEO Greg Spierkel tells Channel Insider that the declines may be coming to an end.

Business at the world’s largest technology distributor Ingram Micro (NYSE: IM) in Q1 looked like a normal seasonal quarter, with sales weaker in January and stronger in the final month of March. The only difference was that sales were down more than 20 percent from the same period a year ago.

It’s a pattern that’s been repeated across the technology industry in recent quarters as companies report sales declines of 20 percent or more from the same period a year ago. But the return to that normal pattern of better sales at the end of the quarter provided some encouragement to Ingram Micro CEO Greg Spierkel.
"We saw a significant step down in January," he tells Channel Insider. "But that step down has not gotten worse. The normal seasonality started taking hold. The world hasn’t gotten worse."

And that’s been the resounding cry of hope: Flat is the new up. Everyone is trying to get to flat.

Ingram Micro reported sales of $6.75 billion for the quarter, a 21 percent decline from the $8.58 billion for the same period a year ago. The translation impact of weaker foreign currencies had an approximate 8 percent negative effect on comparisons to the prior year.

Ingram Micro posted Q1 net income of $27.5 million, or 17 cents per diluted share, compared with net income of $64.1 million, or 37 cents per diluted share in the same period a year ago. In spite of the wide gulf, Ingram Micro pointed out that gross margin was 5.65 percent, essentially flat with the prior-year quarter.  

Spierkel says that while there’s no sign of things getting better in the next quarter or two, it doesn’t look like they are getting worse. A return to positive growth may take until the end of 2009.

Some of that may come from the Obama administration’s economic stimulus package. Spierkel says that several large IT vendors are talking to federal and state decision makers as they craft how the funds will be allocated.

"There are a lot of things we are excited about," Spierkel tells Channel Insider. And while there won’t be an $800 billion jolt in 2009, he says, the IT industry is likely to start feeling some positive impact from the stimulus package by year end. The total spending in the package is likely to be stretched out over three to five years, he says.

Technology areas that remain strong, according to Spierkel, include netbooks, GPS, data center optimization technologies around virtualization and security technology.
 


 
 
 
 
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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