Ingram Micro Inc.

Ingram Micro Inc. (IM - Analyst Report) saw sequential sales rise 12% in the third quarter as the global economy improved. The company trades with a forward P/E of 14.

Company Description

Ingram Micro distributes technology from 1500 vendors to customers in 150 countries around the world. It also provides technology sales, marketing and logistics.

Ingram Micro is the only globally-based technology distributor with operations in Asia.

During the holiday season, the company's 8 advanced logistic centers in the U.S. are expected to ship 3 million units per week. Electronics are expected to dominate the shipments but the company also will ship games and toys.

Ingram Micro Surprised by 45% in the Third Quarter

On Oct 29, Ingram Micro reported third quarter results that beat the Zacks Consensus Estimate by 9 cents. Earnings per share were 29 cents compared to the Zacks Consensus of 20 cents. It was the third beat in the last four quarters.

Sales fell 11% to $7.38 billion from $8.28 billion in the third quarter of 2008 due to the global recession. The company is seeing a strong increase in quarter over quarter sales however.

Sequentially, worldwide sales rose 12%, the strongest quarter over quarter growth in 9 years even though the third quarter is usually the weakest due to seasonality. A reduction in operating expenses by holding down costs boosted the results.

All regions saw year over year sales decline but Asia-Pacific saw just a 5% slide compared with a 16% decline in sales in the Europe, Middle East and Africa region.

Sales fell 10% in the North America and 13% in Latin America, but Latin America is the company's smallest market with just 5% of total sales. North America is the largest market, with 44% of total sales.

2009 Outlook

Ingram Micro is optimistic about a "budding recovery" of the global economy. It forecasts that the fourth quarter year-over-year sales decline will be down to the single digits due to improving demand and better customer engagement.

Zacks Consensus Estimates Climb

Given the third quarter beat, covering analysts raised fourth quarter and full year estimates. In the last 60 days, the fourth quarter Zacks Consensus Estimate rose 7 cents to 50 cents.

The 2009 Zacks Consensus Estimate rose 14% to $1.22 from $1.07 per share in the last 2 months.

Analysts also see 23.90% earnings growth in 2010. The 2010 estimate is up 2 cents in the last month to $1.52 per share.

Value Fundamentals

Ingram Micro is a Zacks #1 Rank (strong buy) stock. It has a price-to-book of only 0.97.

Tracey Ryniec is the Value Stock Strategist for Zacks.com. She is also the Editor in charge of the market-beating Zacks Value Trader service.

Read the full analyst report on IM