Tech Data Q3 beats, sees strong Q4 revenue
Technology distributor Tech Data Corp posted better-than-expected quarterly results, helped in part by tighter cost controls, and forecast strong fourth-quarter revenue, sending its shares to a year-high.
For the fourth quarter, the company expects net sales to rise in the low-to-mid single digit range year-over-year. It had reported revenue of $5.71 billion in the year-ago period.
Analysts expect fourth-quarter revenue of $5.65 billion according to Thomson Reuters I/B/E/S.
While inconsistent across the industry, it is clear that overall IT spending is beginning to show signs of an improving outlook for the first time in four quarters, the company said on a conference call.
Needham & Co analyst Richard Kugele said the recovery in IT spending and the PC refresh cycle will benefit Tech Data directly.
And with Europe recovering from an economic standpoint, because it's been lagging the U.S., you will see the company regain the top line it had even back in fiscal '09, he said.
Net sales in Europe, which contributed 56 percent to total revenue, were down year-over-year, but grew 9 percent sequentially on a euro basis in the third quarter.
The company's net income attributable to shareholders more than doubled to $43.1 million, or 84 cents per share, from $16.8 million, or 33 cents per share, a year ago.
The prior-year period included a $23.5 million foreign currency exchange loss.
Analysts had expected a profit of 71 cents per share.
Net sales at Tech Data, which distributes products of Hewlett-Packard Co and Apple among others, fell 8 percent to $5.64 billion but came in above analysts' expectations of $5.33 billion.
Gross margin for the quarter rose to 5.26 percent from 4.86 percent in the prior year quarter.
Shares of the company were trading up nearly 2 percent at $43.57 Monday on Nasdaq. They touched a high of $44.79 earlier in the session.
(Reporting by Mansi Dutta in Bangalore; Editing by Aradhana Aravindan)
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