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Ingram Micro Posts Higher Q1 Sales, Lower Income

Santa Ana, Calif. — Ingram Micro reported higher worldwide sales but lower net and operating income for the first quarter, ended March 31.

Worldwide sales were $10.26 billion, up 19 percent in U.S. dollars when compared with $8.64 billion in the first quarter last year. The company’s 2012 fourth-quarter acquisitions of BrightPoint and Aptec Holdings added $1.1 billion and $75 million, respectively, to 2013 first-quarter revenue, contributing 13 percentage points to the growth.

First-quarter GAAP net income was $49.8 million compared with 2012 first-quarter GAAP net income of $90 million, which benefited by $28.5 million from a net discrete tax benefit in the quarter, as well as from favorable pricing on hard disk drives.

Worldwide gross profit was $585.3 million. This compares with worldwide gross profit of $467.6 million  in the 2012 first quarter, which benefited by approximately 10 basis points from favorable pricing on hard disk drives.

GAAP operating income was $90.8 million and was negatively impacted by lower gross margin in the technology distribution business and continued investments in key strategic areas across all regions to further diversify revenues. This compares with 2012 first quarter GAAP operating income of $104.1 million, which benefited by approximately 10 basis points from favorable pricing on hard disk drives.

North America delivered solid revenue performance with sales growth of 7 percent, driven by year-over-year growth in all U.S. divisions. Growth in the U.S. was partially offset by a decline of 2 percent in local currency in the Canadian business.

Alain Monie, president/CEO of Ingram Micro, said, “High growth in tablets and other mobile devices continues to affect gross margins. However, this high growth product opportunity also brings the addition of a new set of vendors and customers to the Ingram Micro ecosystem, which enables us to tap into the associated supply chain services to large OEMs and service providers. These services carry better margins and lower working capital metrics. We recognized this opportunity early last year, leading us to acquire BrightPoint, our new mobility business, which has already been nicely accretive to gross margin and earnings.”