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Tech Data's quarterly income hits 4-year high

By JEFF HARRINGTON
Published March 11, 2005


Tech Data Corp. closed its fiscal year by posting its highest quarterly operating income and highest quarterly sales in four years.

The giant Clearwater distributor of computers and related parts said late Thursday that cost control, a surge in sales in the United States and abroad, plus a one-time tax gain fueled a 52 percent jump in net income for the fourth quarter ended Jan. 31. Profits rose to $59.3-million, or 99 cents a share, up from $38.9-million, or 67 cents a share, a year ago.

If some accrued taxes hadn't been reversed, net income would have been 80 cents a share, an increase of 19 percent. That still would have handily beat analysts' expectations of 73 cents per share.

Revenue rose 14 percent to $5.62-billion, compared with $4.92-billion in the year-ago quarter.

For the 2005 fiscal year, Tech Data saw earnings rise 56 percent, to $162.5-million, or $2.74 per share, compared with$104.1-million, or $1.81 per share, a year earlier. Sales were $19.79-billion, up from $17.41-billion.

Both the European and Americas divisions helped. Sales in the Americas rose 16 percent from the year-ago quarter; sales in Europe/Middle East/Africa unit were up 13 percent, or 5 percent on a local currency basis.

"In the Americas, our team has done a great job controling costs while capitalizing on market opportunities," Tech Data chief executive Steve Raymund said during a conference call with analysts.

Hewlett-Packard was Tech Data's largest vendor for the quarter, accounting for 27 percent of sales.

The company continues to have success marketing its "specialized business units," which focus on emerging industry technologies, Raymund said.

Among the more promising market areas, he said, are wireless technology, all types of Internet telephony and new digital technology.

Quizzed by analysts, Raymund said the company has explored opportunities to grow in Asia but no acquisitions are imminent.

The results were released after the close of the market. The stock closed Thursday at $40.03 a share, down 58 cents or 1.4 percent.

In after-market trading, Tech Data shares slipped another 4 percent. That may be because Wall Street cares less about what a company has done for it lately than what it plans to do.

Looking ahead to the first quarter, Tech Data forecast sales of $4.95-billion to $5.1-billion and net income in the range of $34-million to $37-million, or 57 cents to 62 cents a share.

Although there is typically a drop off in sales during the fiscal first quarter, it is usually not that steep, analysts said. Wall Street analysts, on average, were expecting earnings of 67 cents per share on $5.09-billion in sales.

Jeffery Howells, Tech Data's chief financial officer, said the forecast is deceptive because both the first and fourth quarter of the just-ended fiscal year were unusually strong.

Jeff Harrington can be reached at harrington@sptimes.com or 813 226-3407.