Releasing its third quarter financial numbers yesterday, distributor Tech Data reported third quarter net income of US$18.4 million, compared to US$40.9 million in the same period one year ago.
Net sales for the third quarter of Tech Data’s Fiscal 2009, which ended Oct. 31, were US$6.1 billion, a 3.6 per cent increase from the $5.9 million in net sales recorded in the third quarter of its last fiscal year. The results include a net foreign currency exchange loss of US$23.5 million, compared to a net foreign currency exchange gain of US$2.4 million for the third quarter of fiscal 2008.
In its earning statement, Tech Data indicated that extreme foreign currency volatility during the third quarter created a challenging environment, and the loss was primarily driven by the use of certain portions of inventory as a hedge against foreign currency exposures in accounts payable.
“The challenges of the macro-economic environment and accompanying competitive conditions tested Tech Data on many fronts during the third quarter. We were pleased with our overall execution as validated by our sales and operating income performance in the Americas and Europe, but the unprecedented volatility in certain foreign currencies dampened our bottom line results,” said Tech Data CEO Robert Dutkowsky in a statement. “Our targeted investments are reinforcing our value-proposition in the marketplace and resulting in even stronger relationships with our customers and vendor partners. The business fundamentals and financial strength of Tech Data remain solid, and we believe that these strengths, along with our disciplined approach to containing costs and managing our working capital, will serve us well in the current environment and ready us for the long-term market opportunity.”