Santa Ana, Calif. — Ingram Micro announced financial results for the first quarter of 2008, ended March 29.
Worldwide sales for the quarter were $8.58 billion, up four percent from the prior-year period.
Net income for the first quarter was $64.1 million, compared with $37 million in the year-ago period. The prior-year quarter included a one-time charge of $33.8 for the cost of sales for commercial taxes on software imports in Brazil.
Regionally, Ingram Micro saw sales in North America of $3.29 billion for the quarter, or 38 percent of total revenues, which it said was essentially flat with the $3.28 billion it posted a year ago.
The company’s worldwide gross margin was 5.66 percent, up 70 basis points compared with the prior-year quarter. Ingram Micro attributed this growth to “general business improvements in every region.” It also noted that in the same quarter last year, “the charge related to Brazilian commercial taxes adversely affected the gross margin by approximately 41 basis points.”
The company’s total worldwide operating expenses were $386.2 million compared to $335.1 million in the prior-year quarter. According to Ingram, “softer sales growth due to the weaker-demand environment, additional investments in people and infrastructure to support our strategic initiatives and growth in our fee-for-services business had a negative impact on operating expenses as a percent of revenues.”
Worldwide operating income was $99.3 million. In the year-ago quarter operating income was $73.7 million, which included the Brazilian tax charge of approximately $33.8 million.
In North America, operating income was $40.6 million, compared with $57 million in the year-ago quarter.
“Despite the challenging economic environment, gross margins were at the highest first-quarter level in 10 years,” said William D. Humes, executive VP and chief financial officer. “This is a direct result of our commitment to strategic initiatives that improve the margin profile and continued focus on our most profitable lines of business. Other bright spots included strong performances in many of our emerging markets. We are clearly focused on opportunities to reduce operating expenses and inventory levels. While it's difficult to make rapid adjustments in these areas when demand slows, we have improvement plans in place and I expect to see good progress going forward.”