Tech Data: If only we could discount forex and impact of closing country ops...
... we would have grown, grown you hear
Tech Data continued to pile on the pounds dollars in its latest quarterly financials – but only if the crushing currency burden and the impact of exiting operations in Latin America were discounted.
In reality, the world's second largest technology distributor reported a five per cent slump in sales to $6.428bn for Q3 of fiscal '16 ended 31 October – disappointing Wall Street.
The company is not alone – every US-based business with overseas operations has been bitten by the relative strength of the dollar this year. Excluding this, and the discontinuation of the businesses in Chile, Peru and Uruguay, Tech Data actually grew five per cent.
The company didn't reveal which parts of the portfolio were growing or shrinking, but it broke down the regions; the Americas fell three per cent to $2.6bn due to the retreat from three countries; and Europe was down six per cent to $3.9bn when the local currencies were converted into the US denomination.
"On a constant currency basis, we posted good top line growth," said Tech Data CEO Bob Dutkowsky, who provided no colour on the numbers.
Operating expenses for the quarter fell to $246.8m from $268.2m, helped in part by plunging selling, general and admin expenses, and relatively little restatement and remediation-related costs – a hangover from the accounting debacle some years back.
Consequently this boosted operating income to $68.05m from $66.7m. After interest expenses and tax, net income was marginally up on a year ago by some $200k to $41.9m.
The results might have been talked up by senior management, but they missed Wall St expectations, sending down the shares by 12 per cent to $66.39. Analysts expected sales of $6.53bn. ®