Ingram Micro Inc.
) reported third-quarter 2013 non-GAAP earnings of 53 cents per
share, beating the Zacks Consensus Estimate by a penny. Earnings
also improved 29.5% on a year-over-year basis.
Ingram Micro's third-quarter revenues of $10.2 billion lagged
the Zacks Consensus Estimate of $10.5 billion despite increasing
12.4% from the year-ago quarter.
) represented 14% of Ingram Micro's total revenue.
Geographically, revenues from North America increased 2.3%
year over year to $4.1 billion. Revenues from Europe remained
almost flat on a year- over-year basis, to $2.43 billion.
However, revenues from Asia-Pacific and Latin America were down
1.1% and 4%, on a year-over-year basis, to $2.2 billion and
$448.6 million, respectively. Brightpoint contributed $1.06
billion to the quarterly revenues.
The North American revenues were positively impacted by new
client additions and higher demand for storage and infrastructure
systems. Moreover, strong performances from Australia and India
driven by growth across different product lines supported
revenues. Additionally, strong performance of its mobility
business helped revenues. Ingram Micro's mobility business
contributed $1.1 billion to the quarterly revenues.
Ingram Micro's gross margins improved 88 basis points (bps) on
a year-over-year basis to 5.9%. The improvement was mainly
attributable to solid performances in the mobility business,
which was inherited from Brightpoint.
Selling, general and administrative expenses increased 19.6%
year over year to $422.8 million. Ingram Micro reported an
increasing operating expense as a percentage of revenues (up 68
bps on a year-over-year basis) primarily due to continued
investments across all of its operating regions. The company's
non-GAAP operating margins increased 19 bps from the year-ago
quarter to 1.3%.
Ingram Micro reported non-GAAP net income of $83.1 million or
53 cents per share compared with $62.3 million or 41 cents in the
Ingram Micro exited the third quarter with cash and cash
equivalents of $501.6 million, down from $726.9 million in the
previous quarter. Accounts receivable were $4.39 billion. Total
debt (including current portion) was $890.6 million, up from
$884.6 billion in the previous quarter.
We find Ingram Micro's third-quarter results mixed with the
bottom line surpassing the Zacks Consensus Estimate but the top
line missing the same. We believe that the improving IT spending
trend will help Ingram to post better results going forward.
Moreover, the company's focus on the high-margin market and
strategic acquisitions to grow market share is encouraging. The
Brightpoint acquisition is also expected to remain a key growth
driver for the company.
Though Ingram Micro's significant European exposure and a high
debt burden are concerns, we remain fairly optimistic about the
company's strategic relationship with network giant
Juniper Networks Inc.
) and International Business Machines Corp.
Currently, Ingram Micro has a Zacks Rank #2 (Buy).
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