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

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 […]

Written By
thumbnail Jessica Davis
Jessica Davis
Aug 20, 2009
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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."

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