Ingram Micro Inc. (NYSE: IM) warned it would miss third quarter estimates by a wide margin Wednesday and said it was seeking a new chief executive.
The computer components distributor blamed "previously discussed difficult market conditions, primarily in the United States," in a company release, for its expectation of a net income of $15 million to $21 million, or 10 to 14 cents a share for the third quarter ended Oct. 2. First Call was expecting third-quarter earnings to be 41 cents a share. The company also warned it would disappoint the Street in its fourth quarter.
Ingram said it had started a search for a new CEO to succeed Jerre Stead, who would stay on as CEO until his successor was named, and would continue as chairman. Stead has served as chairman and chief executive since 1996.
Shares in Ingram Micro closed at 19 5/16 Tuesday, just above their 52-week low reached after the company warned it would miss estimates in its first quarter and cut 1,400 jobs, about 10 percent of its workforce.
The stock has been recovering since it posted second-quarter earnings of $51.7 million, besting First Call's prediction by a penny.
Stead said competitive pricing, coupled with increased reductions in vendor rebates and incentives, had placed extra pressure on margins, especially in the United States. He also said that though the company's reorganization plans initiated in March were strategically correct, and have given the company a competitive cost structure.