Muted spending on PCs, smartphones, serves and storage in January and February 2016 has seen Ingram Micro record a 12 per cent worldwide decrease in sales for Q1 FY2016 compared with the same quarter in 2015.
Asia-Pacific which includes Australia fared even worse with sales down 13.8 per cent from $US2.54 billion in Q1 FY2015 to $US2.19bn for Q1 FY2016.
Global sales came in at $US9.3bn compared with $US10.6bn for Q1 2015.
"While we did not capture the full revenue and operating income opportunity available to us in the quarter, our focus on higher value business continues to show results as we delivered a 97 basis point increase in consolidated gross margin, buoyed by strong improvement across all regions.
"We have also increased the pace of some of our strategic investment as we focus on building and enhancing the global capabilities that will support our mid- and longer-term business objectives. We filed our preliminary proxy yesterday afternoon and our transaction to join
The company noted in its quarterly report that while it sells finished products purchased from many vendors it generated approximately 14 per cent, 11 per cent and 10 per cent of its consolidated net sales for the thirteen weeks ended April 2, 2016 from products purchased from HP Inc. and Hewlett-Packard Enterprise combined, Apple Inc. and Cisco Systems, Inc., respectively. It generated approximately 15 per cent, and 12 per cent of its consolidated net sales for the thirteen weeks ended April 4, 2015 from products purchased from HP Inc. and Hewlett-Packard Enterprise combined, and Apple Inc., respectively.
First Quarter Results of Operations
Ingram reported the translation of foreign currencies versus last year had a negative impact of 3 percentage points on worldwide sales. Approximately
Additionally, last year's first quarter benefitted from approximately
In a statement, Ingram Micro said the remaining sales decline of 6 per cent was primarily related to soft demand for high volume product categories, particularly in consumer markets, which was consistent with the broader overall IT market demand in the quarter. Significantly higher gross margin was the result of a focus on driving a better mix of higher value sales and solid returns on invested capital, as well as recent acquisitions.
Cash flow from operations for the 2016 first quarter significantly improved to
Generally Accepted Accounting Principles (GAAP) operating income for the 2016 first quarter was
Ingram said 2016 first quarter GAAP results were negatively impacted by costs associated with the pending merger with Tianjin Tianhai, as well as higher reorganisation, integration and transition costs and higher amortization expense due to previously acquired customer relationships that were written-off as a result of the integration of certain operations into the company's existing facilities, and recent acquisitions.
2016 first quarter non-GAAP operating income was
Compared to the same period in 2015, the translation of foreign currencies negatively impacted 2016 first quarter non-GAAP earnings by $US0.0