Tech Data Q1 Profit Declines, But Revenue Up 9% - Update

(RTTNews) - Tech Data Corp. (TECD), a wholesale distributor of technology products, Thursday reported a decline in first-quarter profit, reflecting higher operating expenses. Net sales, however, increased 9 percent and topped analysts' expectations, helped by an improved IT demand environment.

For the first quarter ended April 30, 2014, the company's net income declined to $13.47 million or $0.35 per share from $17.76 million or $0.47 per share in the prior-year quarter.

On a adjusted basis, earnings were $0.72 per share, while the firm posted $0.66 per share in the prior year. On average, nine analysts polled by Thomson Reuters expected the company to report earnings of $0.92 per share for the quarter. Analysts' estimates typically exclude special items.

Net sales for the quarter increased 9 percent to $6.73 billion from $6.15 billion in the same quarter last year. Wall Street expected revenues of $6.48 billion.

Excluding positive impact of strengthening of certain foreign currencies against the U.S. dollar, consolidated net sales increased about 6 percent from the prior-year quarter.

In the Americas, net sales were $2.5 billion, up 8 percent from a year earlier. Net sales from Europe climbed 10 percent to $4.3 billion.

Operating expenses advanced to $303.83 million from $286.38 million, which included restatement-related expenses of $12.24 million, compared to $3.02 million in the first quarter of last year.

Robert Dutkowsky, chief executive officer of the company said, "Our focus on execution, supported by an improved IT demand environment resulted in record first-quarter sales, nearly double-digit year-over-year growth in non-GAAP earnings and strong operating cash flow...We believe our focus on the marketplace and operations will enable us to build upon this momentum during fiscal 2015 and beyond."

Looking ahead to the second quarter, the company expects year-over-year sales growth of low-to-mid single digits in the Americas and Europe, in euros. It also expects gross margin percentage to be in line with recent levels. Analysts estimate the company to report revenues of $6.57 billion for the second quarter.

TECD closed Wednesday's regular trading at $62.94, down 0.87 percent.