Tech Data Blames Flat Results on Brazil, Colombia Closings
Tech Data’s Q4 2012 earnings aren’t exactly inspiring. The bottom line is essentially flat, due in part to the distributor closing down branches in Brazil and Colombia. But is Tech Data’s financial outlook really as dour as Wall Street has made it out to be? Here’s the facts and figures on the distribution company’s future …
In Q4 2012 Tech Data posted $54.1 million in net income, which was down from $77.3 million in Q4 2011. Ouch. Making matters worse, that precipitous 30 percent drop wasn’t held aloft by any other good news, since Tech Data’s revenue was nearly flat. Tech Data posted $7.11 billion for 2012, a negligible change from the $7.12 billion in Q4 2011. Analysts had predicted $7.16 billion, but because Tech Data hardly budged, Wall Street took exception: Tech Data’s stock dropped $3.87, or 6.74 percent, to $53.57 at the time of this writing. And according to Tech Data, Q1 2013 may look similar, the direct result of Tech Data’s exit of operations in Brazil and Colombia. Tech Data’s somewhat unenthusiastic vision for 2013 didn’t help either:
Throughout the remaining quarters, the company expects regional sales comparisons to range from slightly positive to slightly negative, resulting in flat sales for the fiscal year, in local currencies. However, the company believes its diverse product portfolio, proactive steps taken, and investments made, will support its operating margin goal of approximately 1.5 percent for the fiscal year.
Forbes called the results “mixed” and said Tech Data was “skidding” around. Realistically, however, Tech Data is poised to grow, albeit slowly. But between TDMobility, ongoing efforts to broaden its cloud and virtualization portfolio and its existing breadth of solutions designed for the massive base of partners, Tech Data will likely bounce back in no time at all. Meanwhile, partners interested in the granular details of Tech Data’s finances can pore through the results here.