Ingram Micro Inc. (IM): New Analyst Report from Zacks Equity Research - Zacks Equity Research Report


The world's leading technology distributor, Ingram Micro reported impressive third-quarter 2014 results wherein the bottom line came in line with the Zacks Consensus Estimate while the top line beat the same. Further, the company provided an optimistic guidance for the fourth quarter. We believe that the improving IT spending trend will help Ingram post better results, going forward. Moreover, its focus on high-margin markets and strategic acquisitions to increase market share are encouraging. Additionally, the company's focus on cloud computing products is expected to drive growth. However, a declining trend in PC shipments and intense competition remain the headwinds for Ingram Micro. Thus, we reiterate our Neutral stance on the stock.


Ingram Micro Inc. (IM) is a leading distributor of information technology (IT) products and services worldwide. The fortune 100 company markets computer hardware, networking equipment and software products to roughly 200,000 reseller customers in 170 countries through 132 distribution centers worldwide. Founded in 1979, Ingram Micro is headquartered in Santa Ana, CA.

The company has categorized its products into five segments:

IT Peripheral: This segment includes a large number of standard IT peripherals, consumer electronic (CE) components and devices, and other devices. Key products within the IT peripherals category are printers, scanners, displays, projectors, monitors, panels, mass storage products and tape. LCD and plasma displays, enclosures, mounts and media players are the important CE components sold by the company. Key CE devices sold include cell phones, digital cameras, digital video players, TVs and game consoles. Other products included are automatic identification and data capture (AIDC) and point-of-sale (POS) products such as barcode/card printers.

Systems: This segment includes variety of servers such as rack, tower and blade, portable personal computers, desktops and tablets.

Software: The segment includes a variety of computer application software that help to store data electronically. Software products offered by the company include operating system software, entertainment software, middleware etc.

Networking: The networking products include networking hardware, communication products and network security hardware.

Mobility: Within this category, Ingram Micro sells mobile handsets, tablets, SIM cards, navigation devices, aircards, flash memory etc.

Ingram Micro operates in four main geographic regions and reports its revenues under North America (generating 39% of 2013 revenues), Europe (25%), Asia Pacific (20%), Latin America (5%) and BrightPoint (11%) segments.

The company sells products of approximately 1,400 worldwide suppliers of computer hardware, mobility, networking equipment, CE manufacturers, AIDC/POS and software publishers. Among them, Hewlett-Packard is the largest supplier which has contributed nearly 15% of Ingram Micro's fiscal 2013 total revenue.

The company faces stiff price competition in each of the geographic regions in which it operates. Most of the competition currently comes from IT distribution companies, such as Tech Data and Synnex Corporation. Moreover, Ingram Micro competes with Avnet and Arrow in components and electronic products Westcon in networking and security D&H Distributing, Analog Devices Inc., ArchBrook Laguna and Petra in consumer electronics and ScanSource and Bluestar in AIDC/POS products.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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