Ingram Micro Says It’ll Miss Quarterly Sales, Profit Goals

Flat sales to computer dealers who sell to large businesses will cause Santa Ana-based Ingram Micro Inc. to miss Wall Street’s sales and earnings targets for the fourth quarter, the company said Tuesday.

Ingram Micro, the world’s largest personal computer distributor and Orange County’s largest publicly traded company, said it will earn $73 million to $75 million in the fourth quarter, a 9% increase over the previous year.

That translates to 48 to 50 cents a share, far short of the 56 cents expected by financial analysts, according to First Call Corp.

The company said it expects sales for the quarter ending Jan. 2 to be $6 billion to $6.2 billion, nearly $700 million off the consensus expectation.

Ingram released the earnings estimate after the market’s close Tuesday, but its stock still fell $9.25, or 20%, to $37, in New York Stock Exchange trading.

Flat sales to computer dealers in the U.S. accounted for nearly $600 million of that shortfall, while weakness in Latin America made up the rest, Ingram Chairman Jerre Stead told analysts in a conference call.

He blamed one-time incentives that PC makers offered directly to dealers--thereby passing distributors such as Ingram--for the expected shortfall, as well as a quarter that contains five fewer sales days than the same year-earlier period.

“The U.S. is by far our most profitable region, and in a business like ours, a higher percentage of incremental sales falls straight to the bottom line,” Stead said.

PC distributors have struggled all year with lower prices and supply shortages.

“The corporate reseller is buying more directly from” PC makers, said Peter Andrew, an analyst at A.G. Edwards who rates Ingram a “buy.” “PC demand remains strong.”

For the year, Ingram said its profit will grow more than 25%, to more than $250 million. Sales will total $21.8 billion to $22 billion.

The earnings estimate of $1.63 to $1.65 a share is about 7 cents below the consensus expectation by Zacks Investment Research Inc.

Stead expressed optimism that the factors affecting this quarter’s sales will be addressed soon. Wall Street expects the company to earn $2.07 a share next year, according to First Call.

“We feel very comfortable with that estimate at this point, and obviously we will do our best to exceed it,” Stead said.

Ingram will report fourth-quarter and year-end results Feb. 18.

Bloomberg News contributed to this report.