Alan Monie, CEO, Ingram Micro
Ingram Micro has reported revenue increases of more than 10 per cent on a global scale, after announcing its financial results for the first quarter ended April 4, 2015.
“As illustrated by growth in excess of 10 percent on a currency neutral basis, we experienced healthy demand across our geographic regions,” says Alain Monie, CEO, Ingram Micro.
“Asia-Pacific and Latin America were clear standouts, as strong revenues were complemented by solid increases in profitability.
“As anticipated, our sales mix in Europe improved over the 2014 fourth quarter, with lower contribution from consumer markets leading to modest year-over-year improvement in the profitability of our European core business.
“In mobility, we had good growth across all regions, while cloud and supply chain solutions continued to grow at robust rates.”
According to Monie, the distributor continues to generate “significant revenue momentum” as it expands its capabilities globally, including in higher margin cloud and supply chain solutions.
“This is an important element of leveraging our customer, vendor and global infrastructure basis to achieve our longer-term financial targets,” he adds.
Additionally, to ensure the company maintains the trajectory towards its 2016 financial targets, Monie says Ingram Micro are “taking cost actions globally”, which are expected to result in annualised savings of approximately US$100 million in 2016.
“One-time costs associated with these actions are expected to be in a similar range,” he adds. “We manage a complex and broad portfolio of interconnected businesses and operations, and we remain committed to taking the decisions necessary to ensure we maintain our trajectory towards our longer-term financial objectives.
“Additionally, with now good progress on our strategic initiatives, we plan to resume share repurchases opportunistically under our existing US$400 million authorisation, which has approximately $US124 million in remaining available capacity.”
Financials
Driven by solid demand across all regions, worldwide first quarter sales increased year-over-year by $US260 million to $US10.6 billion, up 2.5 per cent in US dollars and up more than 10 per cent on a currency neutral basis.
Non-GAAP operating income was up 2 per cent, or 9 per cent on a currency neutral basis, over last year with lower contributions from North America and Europe more than offset by strong performance in Asia Pacific and Latin America.
In addition to increased strategic investments in Cloud and supply chain solutions, lower contribution from North America was driven by lower mobility gross margins related to higher Verizon channel sales than last year, as well as lower than anticipated resale pricing of returned handsets in the secondary market.
Monie says the company is also addressing the areas of the mobility business that are not currently performing as expected, and will either improve the profitability or exit those portions of the business.
Asia Pacific and Latin America delivered solid operating leverage benefiting from good uptake in advanced solutions and share gains in certain markets.
As a result, 2015 first quarter non-GAAP net income was $US68 million, with non-GAAP earnings of $US0.43 per diluted share, flat when compared to the 2014 first quarter, and up 9 per cent on a currency neutral basis, as the translation of foreign currencies compared to the 2014 same period negatively impacted 2015 first quarter non-GAAP earnings by $US0.04 per diluted share.
