Ingram Micro profits hammered by restructuring

Net profit at Ingram Micro halves in Q1 as the impact of its strategic reorganisation begins to be felt

Costs of nearly $50m incurred from its global restructuring plan and the integration of Brightpoint meant first quarter operating profit at Ingram Micro dropped by nearly a quarter, and net profit by half, the distributor has revealed.

In an otherwise strong quarter, the broadliner said that its worldwide restructuring plan which, as previously reported will see a number of impacts in the European theatre, would eventually save it between $80m and $100m.

Despite the impact on profits, the underlying business showed itself to be in rude health during the first three months of the year, according to president and CEO Alain Monie, who pointed to strong gross margin expansion and consistent top line growth.

The boss said Ingram was “confident in our expectations for full year 2014 worldwide revenue growth in the low- to mid-single digits, in-line with overall global IT spending”.

Net sales expanded from $10.26bn this time last year to $10.38bn, while gross margins went from 5.70% to 5.88% over the same period, helped along by a stronger mix of more advanced solution sales and mobility lifecycle services, and the addition of a number of acquired businesses to the mix.

Europe, it added, was particularly strong, although some of this growth was offset by problems in the Far East relating to mobile handset sales at its new Indonesian business.

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