Ingram Micro Inc.
) reported second-quarter 2014 non-GAAP earnings (excluding
amortization of intangible assets and reorganization charges) of 54
cents per share, beating the Zacks Consensus Estimate of 53
Ingram Micro Inc - Earnings Surprise |
Ingram Micro's second-quarter revenues of $10.9 billion beat the
Zacks Consensus Estimate of $10.6 billion and increased 5.8% from
the year-ago quarter. The company's Technology and other solutions
revenues increased 5% year over year to $9.2 billion while Ingram's
mobility business generated revenues of $1.7 billion, a
year-over-year increase of 13.0%,
Geographically, revenues from North America increased 8.0% on a
year-over-year basis and came in at $4.61 billion. Revenues from
Europe increased 12.8% on a year-over-year basis to $3.42 billion.
Moreover, revenues from Latin America were up 13.4% year over year
to $521.6 million. However, revenues from Asia-Pacific decreased
7.5% year over year to $2.36 billion.
The company also reported that 16.0% of total revenue came from
Hewlett-Packard Company (
) and 7.0% from Apple Inc. (
Ingram Micro's gross margin improved marginally on a
year-over-year basis to 5.8%. The improvement was primarily due to
favorable product mix.
Ingram Micro's operating expenses increased 1.7% year over year
to $497.6 million. However, as a percentage of revenues, expenses
were down 19 basis points. The company also witnessed a marginal
uptick in operating margins year over year, which came in at 1.3%,
aided by contribution from high-margin businesses.
Ingram Micro reported non-GAAP net income of $86.4 million or 54
cents per share compared with $85.7 million or 55 cents in the
year-ago quarter. Non-GAAP net income excludes the effect of
intangible assets and reorganization charges.
Balance Sheet & Cash Flow
Ingram Micro exited the second quarter with cash and cash
equivalents of $470.7 million compared with $424.5 million in the
previous quarter. Accounts receivable were $4.81 billion. Total
debt (including current portion) was $1.16 billion, up from $1.02
billion in the previous quarter.
For the third quarter of 2014, Ingram Micro expects its revenues
to increase in high single digits on a year-over-year basis.
Management expects operating expenses, as a percentage of revenues,
to be positively impacted by the implementation of cost savings
Ingram Micro reported better-than-expected second-quarter
results and guided affirmatively. We believe that an improving IT
spending trend will help Ingram post better results, going forward.
Moreover, the company's focus on the high-margin market and
strategic acquisitions to increase market share are
Ingram Micro has been striking distribution deals with a number
of original equipment manufacturers thus expanding its product
portfolio. Moreover, Ingram Micro's exposure in cloud computing
products is expected to drive growth.
Though Ingram Micro's significant European exposure and a high
debt burden are concerns, we remain fairly optimistic about its
strategic relationships with network giants such as Juniper
Networks Inc. (
), Cisco and International Business Machines Corp.
Currently, Ingram Micro has a Zacks Rank #2 (Buy).
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