Tech Data flat despite strong 2Q results, analyst comments

Tech Data inched up 1/16 to 52 9/16 Wednesday after it easily topped analysts' estimates in its second quarter and received some positive feedback from analysts.

First Call Corp. consensus expected it to return a profit of 67 cents a share in the quarter.

The $5 billion in sales marks a 24 percent improvement from the year-ago quarter when it earned $29.4 million, or 54 cents a share, on sales of $4 billion.

On Wednesday, Chase H&Q reiterated its "strong buy" rating on the stock and bumped its fiscal 2000 and fiscal 2001 earnings estimates to $3 and $3.60 a share, respectively.

"Our favorable stance on the shares is tied to the combination of three things: more favorable industry fundamentals (helping sales growth & profitability), management's continued solid execution (which is driving significant market share gains) and an attractive valuation," the firm said in a research note.

Banc of America analyst Kurt King raised his 12-month price target on Tech Data to $65 a share from $50 a share.

"We generated excellent revenue and profit growth in the second quarter, reflecting Tech Data's strongest market position in our 26-year history," said CEO Steven Raymund in a prepared release. "By relentlessly focusing on our core competencies and delivering unparalleled customer service, we are proving that Tech Data is the best logistics partner for today's technology leaders."

In the quarter, Tech Data recorded a 43 percent surge in U.S. sales and a 16 percent improvement in Europe.

Systems sales increased 37 percent in the quarter, while peripherals and networking sales increased 27 percent and 26 percent, respectively.

Last quarter, Tech Data posted a profit of $37.2 million, or 68 cents a share, on sales of $4.92 billion.

The stock moved up to a 52-week high of 55 1/2 in July after falling to a low of 18 in October.

Fifteen of the 17 analysts following the stock rate it either a "buy" or "strong buy."