) outlined some of its 2016 financial forecasts and reviewed its
growth catalysts during its recent Investor Day held on Jun 25. The
company was confident about meeting or even surpassing its 2015
Ingram Micro expects increased sales of mobility, cloud and
supply chain solutions to be the primary catalyst for growth. The
company's core technology solutions business will also drive
Ingram Micro expects these businesses to help it exceed its 2015
projected revenue growth of 4% to 6%. Moreover, the company expects
to surpass its gross margin range of 5.40-5.60% for the period.
Management also highlighted that earnings per share will be at the
higher-end of the $2.60-$3.10 range, higher than the Zacks
Consensus Estimate of $3.02 per share.
For 2016, Ingram Micro expects revenues to increase at a CAGR of
4.0% to 6.0% with non-GAAP earnings per share coming in at
$3.40-$3.70. The company also expects its operating cash flow to
increase $0.2 billion from 2014 to 2016 to reach $1.2 billion,
while operating margins are expected in the range of 175 to 200
basis points of revenues in 2016.
To set things in motion, Ingram Micro recently introduced its
Cloud Marketplace on a global platform through which channel
partners and professionals can avail the required cloud services.
The Ingram Micro Cloud Marketplace has more than 200 cloud-based
solutions from over 70 vendors, which include Salesforce.com,
VMware and AVG Technologies. The company has added several cloud
service providers such as Charter, Logix and Softlayer to its
Ingram Micro's initiative comes at an opportune moment as cost
benefits of cloud computing are compelling the companies to engage
in massive information technology restructuring and upgrades.
Moreover, Ingram Micro has been teaming with emerging brands in
the mobility space to expand its product and service offerings. The
company continues to invest to improve its mobile capabilities in
all its operating markets. It is also worth noting that the strong
performance of the mobility business led to year-over-year
improvement in Ingram Micro's first-quarter revenues.
We believe that an 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
increase market share are 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 relationships with network giants such as
Juniper Networks Inc.
International Business Machines Corp.
Currently, Ingram Micro carries a Zacks Rank #3 (Hold).
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