Tech Data 3rd-quarter net income falls 14 percent
CLEARWATER, Fla. (AP) — Information technology products distributor Tech Data Corp. said Tuesday that its third-quarter net income fell 14 percent, hurt by competitive pricing, a customer shift toward less profitable products and market share losses.
For the quarter ended Oct. 31, Tech Data earned $45.9 million, or $1.21 per share, down from $53.5 million, or $1.26 per share, in the same quarter last year.
The per-share results in the recent quarter got a 13-cent boost from a big drop in the number of outstanding shares.
Revenue fell 8 percent to $6.04 billion from $6.59 billion.
Analysts, on average, expected a profit of $1.34 per share on $6.2 billion in revenue, according to FactSet.
Tech Data said the weakening of foreign currencies against the U.S. dollar lowered its sales by 5 percentage points. Tech Data, like other companies that do significant business outside the U.S., can be hurt by a rising dollar because income earned in foreign currencies shrinks when it's translated back into a stronger U.S. dollar.
A change in the way the company accounts for sales of warranty services reduced sales by an additional 3 percentage points, but didn't affect its bottom line, Tech Data said.
The company said its earnings were hurt by competitive pricing, a less favorable product mix and certain vendor programs. Profit in its Americas region was also hurt by a shortfall in sales and gross profit stemming from a loss of market share in the U.S.
For the fourth quarter, Tech Data said it expects year-over-year sales growth in the "low single digits."
Tech Data shares fell 66 cents to $44.80 in morning trading.