fourth-quarter earnings fell 50% from a year ago as sales eased and charges hit the bottom line. The tech reseller topped estimates without the items, but guided first-quarter earnings lower.
Tech Data earned $29.5 million, or 52 cents a share, in the quarter, compared with $59.3 million, or 99 cents a share, a year ago. Adjusted to exclude a charge and other expenses, earnings were $40.2 million, or 70 cents a share, in the latest quarter, topping the 67-cent Thomson First Call consensus.
Fourth-quarter sales fell 1.3% from a year ago to $5.53 billion, above the $5.43 billion consensus estimate. The company said that sales in the Americas rose 7.7% to $2.4 billion, making up 43% of the total sales, while sales in Europe, the Middle East and Africa fell 7.2% to $3.1 billion, or 57% of total sales.
Gross margin was 4.84% of net sales, down from 4.95% in the third quarter and 5.22% a year ago. "The decline in gross margin was primarily attributable to challenges in the company's EMEA operations and changes in customer and product mix in both regions. The classification of the company's training business as discontinued operations reduced the gross margin in the fourth quarter of the current and prior year by approximately 19 and 22 basis points, respectively."
For the first quarter, Tech Data expects to earn 28 cents to 34 cents a share, including roughly 3 cents a share of stock-options expense, on sales of $4.85 billion to $4.95 billion. Analysts were expecting earnings of 59 cents a share before the options on sales of $5.14 billion.
The stock closed at $40.97 Tuesday night, 20.2 times the 2006 Thomson First Call consensus earnings estimate of $2.02 a share.