Feeds

Component price collapse takes toll on Bell Micro

Q2 loss, cost-cutting underway

  • alert
  • submit to reddit

Lower than expected sales "in all geographies" has propelled Bell Microproducts into a second quarter loss.

In a preliminary report, the US-owned distie said it made an operating loss of $1.8m on sales of approximately$450 million. Sales were up 18 per cent on Q2 last year, but down 16 per cent on Q1's $534 million.

The company estimates that half of the sequential fall can be attributed to declining ASPs (average selling prices) in computer components - disk drives, semiconductors, peripherals etc. Prices of some volume
commodity products declined approximately 15 per cent during the quarter, the company says.

On the bright side, Bell Microproducts' higher margin storage solutions distribution operations continues to bring home the bacon, showing "relative strength" in the quarter. The upshot was an improvement in gross margins from 8.5 per cent in Q1 to 9.2 per cent in Q2, reflecting the different sales mix.

Bell Microproducts is taking an axe to its cost base. It plans job losses, warehouse consolidation in the US, and to scrap distribution contracts with 25 vendors, accounting for sub-one per cent of sales. The company has not announced what if any cost-cutting activities will take place at Ideal Hardware, its biggest European subsidiary. ®

Whitepapers

Implementing global e-invoicing with guaranteed legal certainty
Explaining the role local tax compliance plays in successful supply chain management and e-business and how leading global brands are addressing this.
Consolidation: The Foundation for IT Business Transformation
In this whitepaper learn how effective consolidation of IT and business resources can enable multiple, meaningful business benefits.
Application security programs and practises
Follow a few strategies and your organization can gain the full benefits of open source and the cloud without compromising the security of your applications.
How modern custom applications can spur business growth
Learn how to create, deploy and manage custom applications without consuming or expanding the need for scarce, expensive IT resources.
Securing Web Applications Made Simple and Scalable
Learn how automated security testing can provide a simple and scalable way to protect your web applications.