Thursday, technology products distributor Tech Data Corp. (TECD) reported a more-than-three fold increase in profit for its second quarter absent charges incurred in the prior-year period. However, on an adjusted basis, earnings declined from the year-ago period and missed market projections. Further, the Clearwater, Florida-based company provided third-quarter sales forecast, which is within analysts' current estimate.
Net income for the second quarter was $23.68 million or $0.45 per share, higher than net income of $7.24 million or $0.13 per share recorded in the previous year. In the preceding first quarter, the company's net income was $23.0 million or $0.43 per share.
Results for the prior-year's second quarter included a $4.3 million charge for the loss on disposal of subsidiaries related to the exit of operations in Israel and the United Arab Emirates, UAE, and $16.6 million in restructuring charges mainly related to the closure of a European logistics center.
Excluding one-time charges, the quarterly net income of $23.68 million or $0.45 per share was lower than $27.50 million or $0.50 per share in the prior-year quarter. On average, seven analysts polled by First Call/Thomson Financial expected earnings of $0.46 per share for the quarter.
Net sales for the second quarter grew 9.8% to $6.17 billion from $5.61 billion in the prior-year period, and beat analysts' consensus estimate of $6.11 billion. In the sequential first quarter, the company had recorded net sales of $6.1 billion.
Commenting on the results, Robert Dutkowsky, Tech Data's Chief Executive Officer said, "Tech Data performed well in the second quarter considering the challenges of the global macro-economic environment. In the Americas, softer IT demand and increasingly competitive market conditions challenged our performance in the United States, while our Canadian and Latin American operations had a solid second-quarter performance. In Europe, we gained a stronger foothold in many regions and better leveraged our infrastructure."
Net sales in the Americas, including North America and Latin America, decreased 3.3% year-over-year to $2.8 billion, and represented 45% of worldwide net sales. However, net sales in Europe grew 23.9% to $3.4 billion or 55% of worldwide net sales. In Euro terms, the quarterly sales growth in Europe was 7.4%.
Gross margin for the second quarter declined to 4.85% from 4.89% a year ago. The company pointed out that its disciplined pricing, inventory management and sales practices contributed in sustaining a relatively stable gross margin performance.
Among peers, Ingram Micro Inc. (IM), a technology distributor, in late July reported second-quarter net income of $58.9 million or $0.35 per share, higher than last year's $52.4 million or $0.30 per share, helped by growth in higher-margin business units and improvement in business mix. Net sales for the quarter rose 8% to $8.82 billion from $8.19 billion a year ago.
For the first six months ended July 31, Tech Data recorded net income of $46.65 million or $0.88 per share, compared to net income of $17.14 million or $0.31 per share in the prior-year period. Excluding charges, prior year's non-GAAP net income was $45.70 million or $0.82 per share. Net sales for the first half increased 11% to $12.23 billion from $11.02 billion in the previous year.
Looking ahead for the third quarter, Tech Data said it anticipates net sales to be in the range of $6.3 billion to $6.5 billion. Analysts, on average, expect revenues of $6.50 billion for the third quarter, with estimates between $6.23 billion and $6.71 billion.
The company noted that the guidance reflects an anticipated low single-digit decline year-over-year in the Americas and mid-to-high single-digit growth in Europe on an euro basis, including incremental sales associated with the acquisition of certain assets of Nordic-based Scribona AB.
The company also said it is implementing new freight and handling fee policies across the entire organization in the third quarter to help mitigate higher transportation costs.
TECD closed Wednesday's regular trading session at $34.89, down $0.42, on a volume of 661 thousand shares.
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June 05, 2026 16:18 ET A busy week for economic news flow saw a slew of reports being released that reflected the trends in the U.S. labor market. In Europe, economic growth and inflation data gained attention as the European Central Bank and Bank of England head for policy session later in the month. In Asia, the monetary policy session of the Indian central bank was in focus as the country, a major oil importer, reels under the pressures of a weaker rupee and rising inflation.