Ingram Micro today issued a profit warning and announced the exit of CEO Jerre Stead. The US distributor said it expected profit of between $15 million and $21 million for the third quarter ending 2 October. It forecast earnings of 10 to 15 cents per share, well below analysts polled by First Call who had predicted 41 cents. This compares to a year ago, when Ingram posted $60 million net income or 40 cents per share. Stead, who has been at the distributor for three years, will keep his position as CEO until a successor is found. He will then continue as chairman. The company, which will announce its third quarter results on 27 October, saw shares drop this morning by 28 per cent to 13 7/8 cents. Stead said competitive pricing, along with greater cuts in vendor rebates and incentives, had damaged Ingram’s gross margins. "In addition, its [Ingram's] efforts to raise prices in selected market segments prompted customers to evaluate other sources for their product purchases, negatively impacting Ingram Micro’s sales," the company stated. Net sales were still expected to rise, it added. "We should not let the short-term difficulties obscure the long-term potential of Ingram Micro," Stead warned. "We continue to see healthy demand for the services we provide, both in our core business as well as in our emerging businesses for reseller and vendor logistics outsourcing and for Internet retail stores." ®