Distribution Outlook Remains Optimistic

The top channel distribution companies remain fairly optimistic about the financial future. Ingram Micro has just reaffirmed its guidance for Q2, anticipating earnings of between 34 and 37 cents per share on sales of between $8.5 and $8.7 billion.

Meanwhile, Arrow Electronics raised the low end of its 2Q earnings forecast by a few cents per share to one more in line with analyst  estimates. And Tech Data just announced a $100 million company share buyback, something it has done each of the last few years.

All of this activity suggests distributors -- the lifeblood of the channel -- aren't suffering much financially, despite the economic problems in the U.S. They are no doubt being helped by strong overseas sales, especially in emerging markets such as India and Brazil. But even here in the U.S., there's no sign of an impending high-tech catastrophe. At worst, U.S. distribution sales are expected to be flat in the near-term. It's likely distributors will be able to dodge the current economic hit and through a combination of operational tightening and overseas growth, emerge relatively unscathed from the current economic malaise. And that should provide relief to the channel as a whole.

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