Tech Data Beats Street, Stock Surges

Tech Data (TECD Quote) surged today, jumping by as much as 12% in morning trading after pre-market earnings showed the company crushing street forecasts.

The Clearwater, Fla.-based hardware and software distributor unveiled EPS of 63 cents, as compared to 40 cents at the same time last year. Analysts projected 34 cents per share.

"We are pleased to deliver a solid first-quarter performance in a difficult economic environment," CEO Robert Dutkowsky said in a release. "Our net sales were affected by the decline in IT spending, but out strength in execution and prudent management disciplines drove continued improvement in our overall operating income performance."

Operating income for the company grew to $49.9 million as against $42.4 million in the first quarter last year. Gross margins leapt to 5.28% from 4.86% year-over-year, primarily because better pricing of inventory in Europe helped compensate for a tougher pricing environment in the Americas.

Tech Data also maintains some financial flexibility after Dutkowsky's announcement of the company's $635 million in cash.

Despite the good news, revenue fell in the quarter. Tech Data's net sales fell to $4.99 billion, which is off 17.7% from the same quarter last year, but still ahead of analysts' projection of $4.94 billion.

Tech Data's release on the earnings blamed foreign currencies for negatively impacting the year-over-year comparison by about 10 percentage points. The statement went on to say that net sales in the Americas and Europe were down from the same quarter last year at 18.1% to $2.21 billion, and 17.4% to $2.78 billion respectively.