We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Tech Data (TECD) Q1 Earnings Beat Estimates, Stock Rises
Read MoreHide Full Article
Tech Data Corp. reported first-quarter fiscal 2017 non-GAAP earnings of $1.05 per share, which beat the Zacks Consensus Estimate of 95 cents. Earnings also increased from the prior-year quarter figure of 80 cents.
Following the release, shares rose 5.95% in yesterday’s trading session.
Quarter in Detail
Tech Data’s revenues rose 1.3% year over year to $5.963 billion but lagged the Zacks Consensus Estimate of $5.986 billion.
Revenues from the Americas (40% of revenues) increased 2%, while the same from Europe (60%) was up 1% on a year-over-year basis.
The company’s gross profit in the quarter was $298.6 million, up from $291.9 million in the year-ago quarter. Gross margin stood at 5% in the quarter.
Non-GAAP selling, general & administrative (SG&A) expenses inched down 0.3% year over year to $241 million in the reported quarter. As a percentage of revenues, SG&A expenses declined to 4.04% from 4.11% in the year-ago quarter.
As a result, non-GAAP operating income rose 14.7% year over year to $57.6 million. Non-GAAP operating margin improved to 0.97% from 0.85% in the year-ago quarter.
Geographically, non-GAAP operating income increased 28.6% in the Americas, and 0.74% year over year in Europe.
Balance Sheet and Cash Flow
At the end of the quarter, Tech Data had approximately $825.7 million in cash and cash equivalents compared with $531.2 million as on Jan 31, 2016. Total long-term debt was $348.8 million.
In the quarter, Tech Data had a cash flow of $276 million.
Outlook
For the second quarter of fiscal 2017, management expects revenues in a range of $6.55 billion to $6.75 billion (on a constant currency basis).
Tech Data projects non-GAAP earnings per share in the range of $1.39 to $1.49.
Our Take
Tech Data has been undertaking strategic initiatives to review and strengthen its operations including collaboration with new vendors and expansion of its coverage model. Additionally, the company has been focusing on developing its capabilities in integrated supply chain, value-added services, data center, cloud and consumer electronics, which is a positive. The company’s cost-control measures are already boosting profitability.
The company had earlier taken some initiatives to focus more on high-growth areas in the Americas as a result of which it witnessed solid growth this quarter. Its business in Europe region also remains strong.
However, its exit from businesses in less profitable regions, though a positive in the long run, will weigh on near-term results. Also, Tech Data’s business has been affected by sluggish demand owing to a slowdown in the PC market. The company may face headwinds because of significant dependence on a handful of customers including Apple (AAPL - Free Report) , Hewlett Packard Enterprise (HPE - Free Report) and HP Inc. (HPQ - Free Report) .
Currently, Tech Data has a Zacks Rank #4 (Sell).
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Tech Data (TECD) Q1 Earnings Beat Estimates, Stock Rises
Tech Data Corp. reported first-quarter fiscal 2017 non-GAAP earnings of $1.05 per share, which beat the Zacks Consensus Estimate of 95 cents. Earnings also increased from the prior-year quarter figure of 80 cents.
Following the release, shares rose 5.95% in yesterday’s trading session.
Quarter in Detail
Tech Data’s revenues rose 1.3% year over year to $5.963 billion but lagged the Zacks Consensus Estimate of $5.986 billion.
Revenues from the Americas (40% of revenues) increased 2%, while the same from Europe (60%) was up 1% on a year-over-year basis.
The company’s gross profit in the quarter was $298.6 million, up from $291.9 million in the year-ago quarter. Gross margin stood at 5% in the quarter.
Non-GAAP selling, general & administrative (SG&A) expenses inched down 0.3% year over year to $241 million in the reported quarter. As a percentage of revenues, SG&A expenses declined to 4.04% from 4.11% in the year-ago quarter.
As a result, non-GAAP operating income rose 14.7% year over year to $57.6 million. Non-GAAP operating margin improved to 0.97% from 0.85% in the year-ago quarter.
Geographically, non-GAAP operating income increased 28.6% in the Americas, and 0.74% year over year in Europe.
Balance Sheet and Cash Flow
At the end of the quarter, Tech Data had approximately $825.7 million in cash and cash equivalents compared with $531.2 million as on Jan 31, 2016. Total long-term debt was $348.8 million.
In the quarter, Tech Data had a cash flow of $276 million.
Outlook
For the second quarter of fiscal 2017, management expects revenues in a range of $6.55 billion to $6.75 billion (on a constant currency basis).
Tech Data projects non-GAAP earnings per share in the range of $1.39 to $1.49.
Our Take
Tech Data has been undertaking strategic initiatives to review and strengthen its operations including collaboration with new vendors and expansion of its coverage model. Additionally, the company has been focusing on developing its capabilities in integrated supply chain, value-added services, data center, cloud and consumer electronics, which is a positive. The company’s cost-control measures are already boosting profitability.
The company had earlier taken some initiatives to focus more on high-growth areas in the Americas as a result of which it witnessed solid growth this quarter. Its business in Europe region also remains strong.
However, its exit from businesses in less profitable regions, though a positive in the long run, will weigh on near-term results. Also, Tech Data’s business has been affected by sluggish demand owing to a slowdown in the PC market. The company may face headwinds because of significant dependence on a handful of customers including Apple (AAPL - Free Report) , Hewlett Packard Enterprise (HPE - Free Report) and HP Inc. (HPQ - Free Report) .
Currently, Tech Data has a Zacks Rank #4 (Sell).
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>