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Ingram revenues grow 33 percent

Ingram Micro posts strong quarterly earnings thanks to robust PC sales and continued strength in its distribution channel.

Computer component distributor Ingram Micro (IM) said strong PC sales and continued strength in its distribution channel helped to boost its quarterly earnings.

Ingram Micro's stock gained a point prior to releasing its earnings yesterday. In early trading today, the company's stock was up a notch to 24-5/8 from yesterday's close of 24-1/8.

The company yesterday reported net income of $40.4 million, or 28 cents a share, for the quarter ending March 31, up from $21.1 million or 21 cents a share for the same quarter last year. Excluding a noncash compensation charge, net income was $41.8 million, or 29 cents a share.

Analysts were expecting earnings to be 25 cents a share, according to First Call.

"There has been some pause in corporate demand, but Ingram's two-step distribution serves small and medium-sized businesses and those have not slowed down," said Steve Fortuna, an analyst with Deutsche Morgan Grenfell

"The stock is not a bargain--it is trading at over 20 times earnings. It is a great company with tremendously strong fundamentals and it is not missing numbers, but it has not been punished by what we have seen in the channel. It has managed to weave its way through this minefield regardless that other companies are blowing up," he added.

Revenue for the quarter jumped to $3.65 billion, growing 33 percent over last year's $2.75 billion in the comparable quarter.

The company has seen an uptick in European sales, which grew 28 percent year over year, according to Fortuna. He added that Ingram, which operates in 19 countries, posted a 25 percent growth rate overall for its overseas operations.

In addition, the company's personal computer division mushroomed 83 percent in year over year sales.

The Alliance division, which focuses on PCs, was boosted by its first full quarter in which it was selling Hewlett Packard (HWP) computers, noted Fortuna.