Tech Data Q4 Revenue Down 8 Percent, Misses Wall Street Forecasts By $330 Million
Tech Data reported disappointing numbers during its earnings call for the fourth quarter of fiscal year 2015.
The company reported net sales of $7.33 billion, down 8 percent from $7.9 billion in the year-ago quarter. In addition, Tech Data missed Wall Street analysts' revenue forecasts by $330 million. It also missed on earnings per share by $0.07, reporting a fourth-quarter earnings per share (EPS) of $1.96.
Shortly after the company reported its fourth-quarter and annual earnings numbers, the Fortune 500 company's stock dipped to $54.45 from an opening of $55.49, but recovered on Thursday.
[Related: Ingram Micro Acquires Portion Of Tech Data's Latin America Business ]
Tech Data CEO Bob Dutkowsky said on an early-morning call with Wall Street analysts that sales in the United States came in below the company's expectations.
"In the Americas, lower margin revenue was most noticeable in Q4," said Dutkowsky during the call. "Our conscious effort on pricing ourselves out of certain business, combined with the slowdown in demand for key products in the second half of the quarter, caused sales in the U.S. to come in below our expectations."
Tech Data reported a 5 percent revenue drop in the Americas to $2.6 billion in the fourth quarter of fiscal year 2015.
On Wednesday, Ingram Micro revealed it was acquiring a portion of Tech Data's Latin America business, and Dutkowsky said in a statement that exiting Peru and Chile, and eventually Uruguay, was "in the best interest of our business and our shareholders."
During the earnings call, Dutkowsky added that a robust IT market and the company's execution led to stronger growth in the first nine months of the year, allowing the company to pull back on high-volume, low-margin business during the fourth quarter of the fiscal year to spark growth.
"While the timing of the fiscal year's earnings growth developed differently than we originally anticipated with most of the earnings growth in the first half, our fiscal- year 2015 operating performance on a worldwide basis came in above planned primarily due to strong European results," Dutkowsky said on the call.
For all of fiscal 2015 Tech Data saw a 2 percent boost in net sales in the Americas from $10.2 billion to $10.4 billion year-over-year.
Despite the dip in his company's sales and earnings numbers, the CEO emphasized that Tech Data is set up for growth going forward as it has heavily invested in a diversified portfolio surrounding emerging technologies. "The good news for Tech Data is that the opportunities, whether it’s the cloud, whether it's proprietary servers, whether it's larger industry standard servers that are virtualized, whether it's small industry standard servers, we sell all of that," Dutkowsky said during the Q&A portion of the call.
"As the IT professionals make their choices as to where they're going to move these platforms, and our VARs help them execute that, our VARs can turn to Tech Data, make one phone call and buy all of those products. And that really is a powerful position for us to play in this transition that will happen inside the data center."
PUBLISHED MARCH 19, 2015