UPDATE: Ingram Micro 2Q More Than Doubles As Global Sales Rise

Ingram Micro Inc.'s (IM) second-quarter profit more than doubled on lower operating costs and charges, and as worldwide sales rose sharply and results topped expectations.

The computer-equipment distributor serves as a go-between for some of the world's leading hardware and software companies and information-technology departments. Ingram is considered a barometer of business technology spending because roughly 80% of its sales go to businesses.

Demand began to pick up in recent quarters, Ingram said, with significant sales growth especially in the Asia-Pacific region. In the recent quarter, it saw high double-digit sales growth in all its regions.

For the current quarter, Ingram predicted revenue and gross margins would remain generally flat with the second quarter, which for the top line would be slightly above analysts' expectations for revenue of $8.12 billion.

Chief Executive Gregory Spierkel said work to control costs coupled with the revenue gains had driven record profit for the quarter, adding customers are engaged and looking for new tools and hardware.

"Companies are saying they've gotten through the worst of what's going on," Spierkel told Dow Jones in an interview, referring to the recessionary environment that caused businesses to dramatically cut tech spending.

However, he said consumer sales, which held up over the past couple of years, will likely take a back seat to stronger business spending over the next six months.

Ingram posted earnings of $67.7 million, or 41 cents a share, up from $25.3 million, or 15 cents a share, a year earlier. The prior-year results included 5 cents in charges related to reducing expenses and to acquisitions in Asia-Pacific. Revenue rose 24% to $8.16 billion.

Analysts surveyed by Thomson Reuters predicted earnings of 37 cents on revenue of $7.9 billion.

Gross margin decreased to 5.4% from 5.9%, though operating expenses fell thanks to fewer severance and other costs.

In North America, sales rose 30%, making up 44% of all sales, while the Europe, Middle East and Africa areas saw sales rise 18%, the Asia-Pacific region recorded a 27% gain and Latin America posted a 12% increase.

Ingram Micro shares closed at $16.17 and were down less than 1% in after hours trades.

-By Yogita Patel and Ian Sherr, Dow Jones Newswires; 212-416-2262; yogita.patel@dowjones.com

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