Earnings Preview: Ingram Micro

Feb.18.09 | About: Ingram Micro (IM)

Ingram Micro (NYSE:IM) is expected to report Q4 earnings after the market close on Wednesday, February 18, with a conference call scheduled for 5:00 pm ET.

Guidance

The consensus estimate is 37c for EPS and $8.95B for revenue, according to First Call.

Analyst Views

Goldman said that Ingram Micro's revenue will likely reflect the weakness in overall tech demand with macro conditions deteriorating throughout the December quarter. The firm expects reported revenue to come in below the Street's estimate of $8.99B and closer to their revised estimate of $8.65B, down -14% year/year. Goldman believes that despite a steady gross margin and cost cutting, lower revenue will likely cause EPS to come in below the Street's estimate and closer to their revised estimate of 35c, down -43% year/year. Goldman is estimating gross margin of 5.54% and operating margin of 1.13%. Amid softness across all regions, Goldman thinks the EMEA segment will likely see the sharpest fall-off year/year as worsening tech spending was compounded by Ingram Micro's deliberate exit of less profitable businesses. Among Ingram's product segments, Goldman expects the most pronounced weakness in systems and peripherals.

Looking forward, Goldman expects the Street's 2009 revenue estimate of $32.1B to move lower following the results; Goldman estimates $31.7B, down -8% year/year. To account for the seasonally weaker March quarter, Goldman recently revised lower their FY09 estimates to $1.23 on $7.45B in revenue versus the Street's $1.29 and $7.98B estimate.

On February 15, Cam Hui on Seeking Alpha named Ingram as one of fifteen "Deep Value Plays" that he saw in this market.