Feeds

Tech Data profits melt in Q2

Curse of EMEA strikes again

Designing a Defense for Mobile Applications

Tech Data has given up hope of turning a profit in the second quarter after its figures were scuppered by a poor performance in EMEA.

The distributor’s preliminary results for the quarter ending July 31 show net sales of $4.94bn, compared to the $4.95bn to $5.1bn it had predicted. Last year it reported sales of $4.8bn.

Net income, excluding restructuring and consulting charges related to EMEA and other charges, is forecast to be “near breakeven”, a far cry from the previously forecast profit of $17m to $20m, excluding charges.

The figures were knocked off course because of lower than forecast sales in EMEA, and lower than expected gross margin, principally (presumably not exclusively) in that troublesome EMEA region.

The numbers were further strained because its original forecast included a 38 per cent effective tax rate, but because of the decline in EMEA income, its effective tax rate is now forecast to be 80 per cent or more.

Tech Data warned its numbers could be further dented by impairment charges for goodwill and/or an increase in the valuation allowance for deferred tax assets because of the decline in EMEA. These could be “substantial” it warned.

Chairman and CEO Steve Raymund said the Americas operation had performed to forecast in a tough market, but “It will undoubtedly take longer than originally anticipated to improve our operating performance in EMEA.”

Earlier this month, Ingram Micro also reported a softening EMEA market, but said it managed to meet its forecasts by making the best of other markets. ®

The smart choice: opportunity from uncertainty

More from The Register

next story
BBC goes offline in MASSIVE COCKUP: Stephen Fry partly muzzled
Auntie tight-lipped as major outage rolls on
There's NOTHING on TV in Europe – American video DOMINATES
Even France's mega subsidies don't stop US content onslaught
You! Pirate! Stop pirating, or we shall admonish you politely. Repeatedly, if necessary
And we shall go about telling people you smell. No, not really
Airbus promises Wi-Fi – yay – and 3D movies (meh) in new A330
If the person in front reclines their seat, this could get interesting
UK Parliament rubber-stamps EMERGENCY data grab 'n' keep bill
Just 49 MPs oppose Drip's rushed timetable
Want to beat Verizon's slow Netflix? Get a VPN
Exec finds stream speed climbs when smuggled out
Samsung threatens to cut ties with supplier over child labour allegations
Vows to uphold 'zero tolerance' policy on underage workers
Dude, you're getting a Dell – with BITCOIN: IT giant slurps cryptocash
1. Buy PC with Bitcoin. 2. Mine more coins. 3. Goto step 1
prev story

Whitepapers

Reducing security risks from open source software
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.
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.
Boost IT visibility and business value
How building a great service catalog relieves pressure points and demonstrates the value of IT service management.
Consolidation: the foundation for IT and business transformation
In this whitepaper learn how effective consolidation of IT and business resources can enable multiple, meaningful business benefits.