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To: TTOSBT who wrote (61454)	7/30/1998 12:01:00 AM
From: VICTORIA GATE, MD	Read Replies (2) \| Respond to of 186894

Wednesday July 29, 8:45 pm Eastern Time PC wholesale giant Ingram Micro profits grow 37 pct By Eric Auchard NEW YORK, July 29 (Reuters) - Computer distribution giant Ingram Micro Inc. (IM - news) on Wednesday reported strong second quarter profit growth, ahead of Wall Street forecasts, as it overcame massive headwinds that are sweeping the industry. In addition, executives said they were confident Ingram could meet analysts' financial projections for 1998. Late Wednesday, Ingram reported net income grew 37 percent to $56.5 million in the quarter from $40.0 million a year ago, excluding a noncash charge to pay for previously granted employee stock options which reduced reported earnings by $900,000. The latest quarter's results translated into 38 cents per share, 2 cents ahead of Wall Street projections, according to First Call, which compiles brokerage earnings estimates. The Santa Ana, Calif.-based company, which is nearly double the size of its closest rival in the wholesale computer business, said net sales were $4.96 billion during the June quarter, up 39 percent from the same quarter last year. Jerre Stead, Ingram's chief executive, said in an interview afterward that the company was on track to become a $24 billion company by the end of 1998. In addition, Stead said he was comfortable with Wall Street earnings forecasts that project the company will earn $1.69 per share for the whole of 1998, up from $1.38 in 1997. ''We are comfortable with the analysts estimates we are seeing,'' Stead said, referring to the $1.69 a share estimate. Ingram wholesales a mix of computer systems, software, printers and peripherals and networking equipment, with sales roughly balanced among each of those four categories. Resellers buy the equipment for sale to corporate and retail customers. Ingram weathered an industry glut of excess personal computer inventory during the first half of 1998 and a related move by PC makers to cut costs and shift a greater share of manufacturing assembly duties to distributors like Ingram. ''The industry is undergoing the biggest changes in all the years I have been in this business,'' said the 30-year computer industry veteran. But thanks in part to its size and breadth of product offerings, Ingram has continued to grow in excess of 30 percent a year, far faster than the industry growth rate of around 18 to 20 percent a year. The Ingram CEO said that second quarter earnings results were buoyed by productivity improvements and lower costs that boosted the distributor's razor-thin operating profit margins to 2.26 percent of sales from 2.18 percent a year ago. The strong U.S. dollar cut reported sales by 1.1 percent, Stead said, due to the effect of translating sales generated in Canada and overseas into dollars for reporting purposes. U.S. sales totaled $3.48 billion during the second quarter, while Europe had $1.01 billion, excluding the contribution of Macrotron AG, a German computer distributor which it acquired in a $100 million deal that closed Tuesday. Canada and Latin America, a category the company classifies as ''other'' accounted for $470 million in quarterly sales. The company now participates only indirectly in Asia after it sold its Asian operations late last year to Singapore-based distributor Electronic Resources Ltd. (ERLS.SI) in return for a 21 percent stake in Asia-focused distributor. Operating profit margins gained slightly in the United States but more than doubled in Europe. During the latest quarter Ingram made several moves to build its presence in Europe, through its acquisition of Macrotron, a $1.5 billion business, and a deal to takeover PC production for ailing Dutch computer marker Tulip (TULN.AS). Stead said he expected to produce about $6 billion in revenues from Europe, behind regional leader CHS Electronics Inc. (CHSE - news), but in ''a real horse race'' this year for No. 2 in Europe with Tech Data Corp.(TECD - news).