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MicroAge profits take a dive

Thinkpad shortages are to blame

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MicroAge has seen its profits tumble for its third quarter. The US integrator blamed product shortages, particularly from IBM on ThinkPad's and components, for the fall in profits. MicroAge made a $728,000 profit for the quarter, down from $6.6 million last year. Sales rose 24 per cent to $1.4 billion for the company as a whole. Pinacor saw a 24 per cent sales rise to $1.3 billion, while MicroAge sales were relatively flat at $436 million. The difference between the total sales figure and the figures of the two companies takes into account the business they do with each other. The two units do not publish separate profit figures. MicroAge is tipped to off-load its Pinacor distribution business to CHS. MicroAge chairman and CEO Jeffrey McKeever said the company had reduced inventory turns to the lowest number since it went public - 29 days down from 38. McKeever cited the lack of vendor price-protection for the drop, and said that it meant distributors did not want to hold too much stock. Product shortages meant that sales of IBM products declined as a percentage of total product sales. Sales of Apple products were up 44 per cent during the quarter, he said.

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