Tech Data (TECD) Tops Q3 EPS by 3c, Revenues Miss

Tech Data (NASDAQ: TECD) reported Q3 EPS of $3.02, $0.03 better than the analyst estimate of $2.99. Revenue for the quarter came in at $9.12 billion versus the consensus estimate of $9.37 billion.

• Worldwide net sales were $9.1 billion, a decrease of 2 percent compared to the prior-year quarter. On a constant currency basis, net sales were flat.
  • Americas: Net sales were $4.2 billion, an increase of 2 percent compared to the prior-year quarter. On a constant currency basis, net sales increased 2 percent.
  • Europe: Net sales were $4.6 billion, a decrease of 6 percent compared to the prior-year quarter. On a constant currency basis, net sales decreased 2 percent.
  • Asia Pacific: Net sales were $0.3 billion, an increase of 4 percent compared to the prior-year quarter. On a constant currency basis, net sales increased 4 percent.
• Three vendors represented 10 percent or more of worldwide net sales: Apple Inc. 17%; Cisco Systems 11%; and HP Inc. 10%.
• Net cash generated by operations during the quarter was $310 million. The cash conversion cycle improved by one day to 17 days, compared to the year-ago period.
• At October 31, 2019, the company had approximately $1.6 billion of goodwill and acquired intangibles.
• Return on invested capital for the trailing twelve months was 12 percent, compared to 8 percent in the prior year. Adjusted return on invested capital for the trailing twelve months was 15 percent, compared to 12 percent in the year-ago period.
• In the quarter, the company repurchased 518,433 shares for $49 million at an average purchase price of $95.09 per share. In connection with the subsequent events described below, the company has suspended its share repurchase program.

“We delivered solid third quarter results while continuing to execute on our strategy and portfolio optimization actions,” said Rich Hume, chief executive officer. “In Q3, we also announced our intention to acquire DLT Solutions, a premier software and cloud solutions aggregator focused on the U.S. public sector. This acquisition reflects our strategy of delivering higher value – strengthening our end-to-end portfolio and accelerating our capabilities in next-generation technologies.”

For earnings history and earnings-related data on Tech Data (TECD) click here.

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