Ingram Micro Slips Past Lowered Wall St. Forecasts

Computer products distributor Ingram Micro Inc. reported first-quarter earnings Tuesday that beat lowered Wall Street forecasts, but reduced its outlook for the second quarter.

For the first quarter, Ingram posted net income of $26.4 million, or 18 cents a share, a penny more than the consensus estimate of Wall Street analysts surveyed by First Call/Thomson Financial.

The company earned $96.1 million, or 65 cents a share for last year’s first quarter, but that included gains from securities sales. Without those gains, the company earned $24.7 million, or 17 cents a share.

Quarterly sales fell 7.7% to $7.2 billion. U.S. sales slumped 15% while sales in Europe fell less than 1%. Excluding foreign-exchange fluctuations, Ingram Micro said European overseas sales would have risen 8%. In the rest of the world, its sales rose 5%.

The company, feeling the effects of the technology slowdown, said it expects its second-quarter operating income, excluding nonrecurring items, to range from 7 to 12 cents a share. Analysts were expecting 19 cents a share.

“In March, the already significant slowdown fell even more dramatically in the U.S.,” Chief Executive Kent Foster said in an interview. “We are not seeing any trends that would indicate the market is picking up” in the United States.

At this point the company’s strongest region for growth is Europe, Foster said. Ingram Micro is seeing some slowdown in the European market now, but business in that region typically declines in the second quarter over first quarter.

Inventory at the end of March was reduced $608.4 million, or 21%, to $2.3 billion from the end of December. Ingram cut its spending by $8 million in the first quarter, and plans to save the same amount in this quarter, Foster said.

In February, when it released its fourth-quarter results, Ingram Micro said it was expecting first-quarter earnings of $22 million to $27 million, or 15 cents to 18 cents a share, on revenue of $7.3 billion to $7.6 billion. At the time, analysts estimated earnings would be 32 cents a share.

Since the beginning of the year, the company has cut 1,000 U.S. jobs, half through layoffs and half by attrition, according to Kevin Murai, president of U.S. operations.

Ingram Micro stock gained 58 cents to close at $15.06 a share on the New York Stock Exchange. The stock has outperformed the tech-heavy Nasdaq index, growing 37% since the start of the year compared to the index’s 15% decline.

Times staff writer Karen Alexander contributed to this report. Reuters and Dow Jones Newswires were used.