Tech Data reported better-than-expected fourth-quarter 2014.
Earnings of $2.10 per share beat the Zacks Consensus Estimate by
$0.15. Tech Data's revenues of $7.97 billion were almost in line
with the Zacks Consensus Estimate. We believe that sluggish PC
shipments will hurt Tech Data's top-line growth in fiscal 2015. The
company's growing exposure to volatile European markets remains a
concern. Moreover, its back-end loaded guidance will remain a
headwind in fiscal 2015. Nevertheless, positive guidance will give
some momentum to the stock. The completion of the SAP
implementation will improve execution. Its partnership with Google
will drive top-line growth, going forward. Further, Tech Data's
improving execution (particularly in Europe), superior customer
service and improving market share in the Americas are the major
positives, going ahead. Thus, we maintain a Neutral recommendation
and set a price target of $66.00.
Incorporated in 1974 and based in Clearwater, Fla., Tech Data
Corporation (TECD) is one of the leading wholesale distributors of
information technology (IT) products, logistics management and
other value-added services. The company distributes and markets
more than 150,000 products from more than 600 manufacturers and
Broadline (notebooks, tablets, desktop systems, printers,
supplies and components) products accounted for 46.0% of sales in
2014, followed by Data Center (servers, server accessories,
networking products, storage hardware and networking support
services) at 23.0%, software at 18.0%, mobility at 9.0% and
consumer electronics at 4.0%.
Value added resellers contributed 51.0% of sales, direct
marketers & retailers 28.0% and corporate resellers 21.0% of
sales in fiscal 2014. The company generated approximately 21.0% of
sales in fiscal 2014 from products purchased from
Tech Data reported revenues of $26.82 billion in 2014. The
company sells products in more than 100 countries and generates
revenues primarily from two geographical segments: the Americas
(including North and Latin America) and Europe. In fiscal 2014, the
Americas segment reported sales of $10.19 billion (38.0% of sales),
while Europe reported sales of $16.63 billion (62.0% of sales).
Tech Data faces significant competition from Ingram Micro Inc.,
Synnex Corp., Arrow Electronics Inc. and Avnet, Inc. along with
some regional and local distributors.
Tech Data Corporation (TECD): Read the Full
Want the latest recommendations from Zacks Investment Research?
Today, you can download 7 Best Stocks for the Next 30 Days.
Click to get this free report
TECH DATA CORP (TECD): Free Stock Analysis
To read this article on Zacks.com click here.