Tech Data Q4 profits jump on tax settlement
Tech Data had a good fourth quarter, generating revenues of $5.6bn , up 14.2 per cent on the same quarter last year. Net income improved too, up from $38.9m in Q404 (which ended January, 2004) to $59.3m this time around.
However, the distie giant was helped along by returning into the profit line $11.5m in previously accrued taxes, which no longer have to be paid. A full contribution from Azlan, Europe’s biggest networking distie, bought last year, and a favourable exchange rate will have also played their - unspecified - parts in the profits uplift. Tech Data, headquartered in Clearwater, Florida, reports in US dollars, but gets 57 per cent of its turnover from EMEA.
Gross margins in Q4 were 5.44 per cent of sales, falling half a point on Q4 fiscal 2004’s 5.94 per cent. The company blames a competitive selling environment for the margin pressure, but trumpets its ability to contain costs with fourth-quarter selling, general and administrative expenses (SG&A) a skinny 4.10 per cent of sales, down from 4.69 per cent last time around.
For the full year, Tech Data posted sales of $19.8bn and net income of $162.5m. It forecasts net sales of $4.95bn -$5.10bn for Q1, fiscal 2006. Net income is expected to be in the range of $34m-$37m. ®