Tech Data's CEO claims the distributor has delivered a "solid" Q3, despite posting a sales and profits decline for the quarter.
Non-GAAP operating income fell by 12 per cent year on year to $166.3m for the three months until 31 October on net sales that dipped by two per cent to $9.12bn. Profits fell by three per cent on a GAAP basis.
The US distributor missed its revenue forecast by about $250m, claims Seeking Alpha, but beat its non-GAAP earnings per share estimate by $0.03 to $3.02.
The distributor's European business bore the steepest revenue decline, with sales falling by six per cent to $4.62bn. Operating income, however, rocketed by 67 per cent on a GAAP basis to $66.5m and nine per cent to $72.4m on a non-GAAP basis.
European boss Patrick Zammit previously told us that he is purposely sacrificing revenues in Europe as it steps away from low-margin distribution contracts.
Tech Data's US business told the reverse story. Net sales grew by two per cent to $4.2bn, but operating profits shrivelled by 27 per cent (GAAP) and 20 per cent (non-GAAP) to $82.4m and $99.4m respectively.
Its Asia Pacific business meanwhile grew sales by four per cent to $294.4m but suffered a 90 per cent drop in GAAP profits to $300,000.
CEO Rich Hume claims that Tech Data posted a "solid" Q3.
"We delivered solid third quarter results while continuing to execute on our strategy and portfolio optimisation actions," Hume said.
"In Q3, we also announced our intention to acquire DLT Solutions, a premier software and cloud solutions aggregator focused on the US public sector. This acquisition reflects our strategy of delivering higher value - strengthening our end-to-end portfolio and accelerating our capabilities in next-generation technologies."
The quarterly results were published just two weeks after Tech Data confirmed rumours that it will be acquired by private equity firm Apollo Global Management in a $5.4bn deal.
As a result of its pending sale to private equity, Tech Data announced that it will not be hosting an earnings call or provide any forward-looking guidance.
The acquisition is expected to close in the first half of next year.
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