Ingram slashes profit outlook on soft market
Business went on holiday and never came back
Ingram Micro cast its own little shadow of financial doom today when it slashed its profit forecast after the market softness it had seen in July and August had persisted into September.
The IT distributor had said back in July that it hoped to make sales of between $8.5bn and $8.8bn and net income of $52m to $61m in the third quarter, despite macroeconomic softness. Earlier this month, it hinted that it might have to rethink its forecast, “after we have a clearer picture of September's anticipated results".
Today, it confirmed that this quarter’s revenues are now expected to range between $8.3bn to $8.6bn, with net income coming in at a much reduced $30m to $39m. This includes a $5m cost for the completion of “expense reduction plans in North American and Europe”.
CEO Greg Spierkel said that Ingram had not the usual post-holiday bounce it expected in Europe, and while North America had been “relatively stable” in July and August, “we’re experiencing broad-based softness in September”.
While the die is cast for the current quarter, Spierkel said all the firm’s regions had plans in place to improve its figures, including exiting low-end business and slashing costs “as quickly as possible”. ®