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Tech Data Slashes Outlook

The company cuts its quarterly profit estimate in half.

Tech Data

(TECD) - Get Tech Data Corporation Report

warned that its profit for the second quarter would be about half as large as previously anticipated.

The distributor of computer products said its net income for the quarter ended July 31 would come in between 21 cents a share and 28 cents a share, compared with its previous guidance of 40 cents to 45 cents a share.

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Tech Data said that the decline in expected earnings was largely attributed to a disappointing gross margin in Europe. In a statement, CEO Steven Raymund indicated that the company's efforts to restructure its Europe business would boost operating performance in the future.

"The revised outlook also excludes any potential impairment charges for deferred tax assets, goodwill and other long-lived assets, which could be material," the company said in its statement. "The company is in the process of completing its review and assessment of possible charges related to such assets."

The company said it expected its revenue for the quarter to be between $4.8 billion and $4.82 billion, at the high end of its previous revenue guidance of $4.7 billion and $4.85 billion but down from the $4.6 billion revenue in the same quarter last year.

Shares of Tech Data's stock, which rose 1.5% to $39.08 Tuesday, were recently halted in after-hours trading.