Ingram profits up, sales down

Cost cutting axe

Ingram Micro, the world's biggest IT distie, posted better than expected Q2 earnings, thanks to cost-cutting.

Cost-cutting is, of course, what commodity disties have to do if they want to stay in business, but Ingram appears to have mastered this brutal art better than most. Even so, skinny profits show that there is little margin for error, even for the world's biggest disties.

The company posted Q2 earnings up 31 per cent to $11.5m ($8m) on sales down $5.17 billion from $5.35 billion.

Considering that Ingram reports in US dollars and this currency has fallen a lot since Q2 last year, the headline revenues suggest either that average selling prices have tumbled, that Ingram has lost market share, or that the world economy remains in the doldrums, if you are flogging lots of computer kit in lots of warehouses around the world. Perhaps it is a combination of all three. Ingram says that demand was soft in North America, solid in Europe, and bouncing back from SARS in Asia in Q2. ®