Ingram Micro: The Recession Is Over
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."