May 21, 2010 / 11:47 AM / 8 years ago

UPDATE 2-Tech Data Q1 above Street, sees strong Q2

* Q1 EPS $0.88 vs est $0.75

* Q1 rev $5.6 bln vs est $5.36 bln

* Sees strong Q2 rev (Adds conference call details, analysts comments, shares)

By Mansi Dutta

BANGALORE, May 21 (Reuters) - Technology distributor Tech Data (TECD.O) posted quarterly results above estimates, aided by a strong demand in Europe and Americas and guided year-over-year sales growth on a local currency basis in both regions.

Broader IT spending, particularly the refreshes -- PC servers, storage -- are positive signs that you should still see upper single digit, if not 10 percent, year-over-year IT spending growth this year, Needham & Co analyst Richard Kugele said.

For the quarter ended April 30, the company’s net income attributable to shareholders rose to $45.6 million, or 88 cents a share, from $31.8 million, or 63 cents a share, a year ago.

Sales for the company, which distributes products of Hewlett-Packard Co (HPQ.N) and Apple (AAPL.O), rose 13 percent to $5.62 billion.

Analysts were looking for earnings of 75 cents a share, before special items, on revenue of $5.36 billion, according to Thomson Reuters I/B/E/S.

Net sales in the Americas rose 13 percent to $2.46 billion. Sales in Europe, which makes 56 percent of the total sales, rose 14 percent to $3.16 billion.

Europe’s growth was broadly based, particularly Germany, the Nordics, France, and Switzerland, which all posted double-digit sales growth, the company said in a conference call.

    “Mobile phones, desktops, and notebooks were some of the leading product categories in Europe.”

    Last quarter, the company closed two acquisitions that further strengthened its European enterprise business.

    Some of the stronger performing product categories in the Americas include television, flat panel displays, desktop, and servers, Tech Data said.

    Tech Data said it was still seeing some weakness in the eastern European region, where recovery appears to be lagging.

    “That’s been going on for a while ... and that’s only a small piece of what they do, vast majority of their European business occurs in Germany, France, UK, Italy,” Kugele said.

    Kugele has a “strong buy” on the stock. Shares of the company were trading up 3 percent at $40.66 Friday on Nasdaq. (Reporting by Mansi Dutta in Bangalore; Editing by Don Sebastian and Prem Udayabhanu)

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