Tech Data Shares Up Sharply as Earnings Top Estimates
Tech Data, a distributor of computer products, Wednesday posted a quarterly profit that handily beat Wall Street estimates on strong growth in the Americas, sending its shares up more than 8 percent.
The company also gave a revenue forecast for the current quarter that topped market expectations, helping boost its shares $3.06 to $38.29 on the Nasdaq.
Tech Data posted net income of $7.2 million, or 13 cents a share, for its fiscal second quarter ended July 31, compared with a loss of $155.5 million, or $2.81 a share, a year earlier when it shouldered charges for goodwill impairment and other items.
Before items such as restructuring charges, Tech Data earned 50 cents a share, compared with average analyst estimates for 30 cents, according to Reuters Estimates.
Revenue rose more than 13 percent to $5.6 billion, compared with average analyst estimates for $5.295 billion.
Company executives said during a call with analysts the results beat "internal plans and expectations on almost every metric" and that Tech Data had gained market share among small and medium business customers as well as in Latin America.
Tech Data competes with Ingram Micro in the computer distribution market.
"It was a very good quarter. They showed excellent growth in the Americas which was a combination of a resurgence in the (personal computer) market in the U.S. and the rest of the Americas," said Pacific Crest analyst Andy Hargreaves.
The company was also helped by favorable currency exchange rates in its Europe, Middle East and Africa sales regions, according to Hargreaves.
"It's a company that has been underperforming their closest peer for the last couple of years. The fact they're showing a bit of potential is getting people excited," Hargreaves said, comparing Tech Data to Ingram Micro.
Tech Data forecast third-quarter sales of $5.75 billion to $5.90 billion, ahead of average analyst estimates for revenue of $5.67 billion.
The estimate assumes growth in the low double-digit percentage range in the Americas and flat-to-low single-digit growth in Europe on a local currency basis, the company said.
Ingram Micro shares were up 56 cents or more than 3 percent at $19.07 in morning trade on New York Stock Exchange.