By RTT News, March 04, 2013, 07:22:00 AM EDT
(RTTNews.com) - IT products distributor Tech Data Corp. ( TECD ) reported Monday a profit for the fourth quarter that increased from last year, reflecting a tax valuation gain, lower expenses and sales growth. However, adjusted earnings per share missed analysts' expectations, while quarterly revenues topped their estimates by a whisker. The company also provided sales growth forecast for the full-year 2014.
"After a strong performance in fiscal 2012, we entered the year against a backdrop of continued economic uncertainty and a cautious IT spending environment. As the year progressed, we faced what is arguably one of the IT industry's most rapid product mix shifts - away from higher-margin products such as servers, to lower-margin products such as tablets, mobile phones and software, as well as a shift in our vendor concentration," CEO Robert Dutkowsky said.
The Clearwater, Florida-based company reported net income of $82.54 million or $2.17 per share for the fourth quarter, higher than $54.071 million or $1.29 per share in the prior-year quarter.
Results for the latest quarter include a net benefit of about $26 million or $0.69 per share related to the release of a deferred tax valuation allowance in the European region, while the year-ago quarter included a $28.3 million charge or $0.46 per share related to the loss on the company's decision to exit its operations in Brazil and Colombia.
Excluding items, adjusted net income for the quarter was $56.55 million or $1.48 per share, compared to $73.29 million or $1.75 per share in the year-ago quarter.
On average, eight analysts polled by Thomson Reuters expected the company to report earnings of $1.76 per share for the quarter. Analysts' estimates typically exclude one-time items.
Net sales for the quarter grew 5 percent to $7.46 billion from $7.11 billion in the same quarter last year, and topped seven Wall Street analysts' consensus estimate of $7.22 billion by a whisker.
For the quarter, net sales in the Americas, including North America and South America, declined 6 percent to $2.60 billion, and represented 35 percent of total net sales. In Europe, net sales increased 12 percent to $4.9 billion, representing 65 percent of total sales. The European sales growth was 13 percent on a euro basis.
Excluding sales related to the SDG acquisition of about $623 million, Europe's net sales increased only 2 percent in euros and in U.S. dollars.
Operating margin for the quarter expanded 7 basis points to 1.25 percent from last year's 1.18 percent as selling, general and administrative expenses, as a percentage of net sales, declined 25 basis points, partially offset by an 18 basis points contraction in gross margin.
For fiscal 2013, the company reported net income of $214.59 million or $5.48 per share, higher than $206.40 million or $4.66 per share in the prior year. Excluding items, adjusted net income for the year was $188.60 million or $4.81 per share, compared to $225.62 million or $5.09 per share in the year ago. Net sales for the full year declined 4 percent to $25.36 billion from $26.49 billion in the previous year.
Analysts expected the company to report full-year 2013 earnings of $5.08 per share on annual revenues of $25.12 billion.
Looking ahead to the first quarter of fiscal 2014, the company expects high single-digit year-over-year sales growth, with flat sales expected in the Americas and in Europe in euros, excluding SDG.
"However, despite the macro-economic, industry and company-specific headwinds we faced in fiscal 2013, investments we made in strategic acquisitions, vendor relationships, and system enhancements further strengthen and better-position Tech Data for the future," Dutkowsky added.
TECD closed Friday's regular trading session at $52.23, down $0.24 on a volume of 0.42 million shares. In the past 52-week period, the stock has been trading in a range of $42.25 to $55.33.
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