Tech Data easily topped analysts' estimates in its fourth quarter Wednesday, but it drastically reduced sales and earnings targets for the first quarter of fiscal 2002.
The computer-equipment distributor returned a profit of $52.7 million, or 92 cents a share, on sales of $5.3 billion in the quarter.
First Call consensus pegged Tech Data for a profit of 86 cents a share in the quarter.
The $5.3 billion in sales represents an 11 percent improvement from the year-ago quarter when it earned $37.1 million, or 67 cents a share, on sales of $4.8 billion.
"Our results speak for themselves," said CEO Steven Raymund during a conference call with analysts. "We can't complain about a 42 percent increase in net income" from the year-ago quarter.
Tech Data (Nasdaq: TECD) shares closed off $1.75 to $26.31 ahead of the earnings report before falling to $24.88 in after-hours trading.
Although it did top the Street estimate by 6 cents a share in the fourth quarter, Tech Data said the slowing U.S. economy combined with early signs of weakness in Europe will result in much lower sales and earnings in the first quarter of fiscal 2002.
Tech Data now expects first-quarter sales of between $4.6 billion and $4.8 billion and earnings of between 45 cents and 53 cents a share.
First Call consensus was expecting a first-quarter profit of 74 cents a share.
"Right now, our greatest adversary is the economy," Raymund said. "The timing of a turnaround is unclear at this time, so we're not comfortable predicting results for the current fiscal year."
Bill Cage, an analyst at First Union Securities, downgraded Tech Data from a "strong buy" recommendation to a "buy" earlier this month after competitor Ingram Micro (NYSE: IM) slashed its near-term outlook on similar macroeconomic concerns.
Buckingham Research analyst Jay Stevens, who expected a sharp reduction in estimates for the first quarter, pegged Tech Data for a profit of 86 cents a share in the quarter on sales of $5.25 billion.
"Tech Data is a well-run company that will do better than its peers during this downturn," he said. "But in these conditions, there's not much you can do."
For the fiscal year, Tech Data pocketed $178 million, or $3.14 a share, on sales of $20.4 billion, up 20 percent from fiscal 2000 when it earned $127.5 million, or $2.34 a share, on sales of $17 billion.
By region, U.S. sales accounted for $11.25 billion in sales, or 55 percent of total sales. Sales into Europe improved 19 percent from fiscal 2000 to $7.81 billion, while other international customers chipped in $1.35 billion, or 7 percent of total sales.
Compaq (NYSE: CPQ) and Hewlett-Packard (NYSE: HWP), two PC and peripheral vendors that have warned of slowing sales and earnings in recent quarters, remained as Tech Data's largest customers, accounting for 20 percent and 19 percent of total sales, respectively, in the fiscal year.
By segment, peripherals sales represented 44 percent of total sales in the fiscal year, up 20 percent from fiscal 2000. Systems sales accounted for 28 percent of total sales, while networking and software sales chipped in 17 percent and 11 percent, respectively.
"Throughout this downturn, quality companies will become stronger and leaner," Raymund said. "We're confident that we'll emerge stronger when this slowdown ends."
Last quarter, Tech Data hurdled analysts' estimates when it posted a profit of $47.2 million, or 82 cents a share, on sales of $5.2 billion, beating the consensus estimates by 7 cents a share.
Its shares rallied up to a 52-week high of $55.88 in September before slumping to a low of $24.94 in January.
Eight of the 11 analysts following the stock maintain either a "buy" or "strong buy" recommendation.