Distributor Tech Data's Q1 Net Income Soars 49% as Deal Pricing Stays Competitive
IT Distributor Tech Data's net income soared 49 percent in Q1 compared with last year's quarter. But the company did that on revenues that fell 17 percent year over year. CEO Bob Dutkowsky tells Channel Insider that Tech Data delivered that kind of bottom-line performance in a market where pricing on every deal remains deeply competitive by walking away from certain deals.
Seeming to defy the recession, Tech Data's (NASDAQ:TECD) net income
soared 49 percent year over year in the distributor's first fiscal
quarter. But the company did that on revenues that declined 17 percent
year over year.
That's because not all revenue is good revenue, Tech Data CEO Bob Dutkowsky tells Channel Insider. Dutkowsky says that Tech Data has walked away from nearly $1 billion worth of revenue in the last year because the pricing just didn't make sense.
"In this business not all revenue is good revenue," he says. Pricing pressure is fierce in the market. With less deals to be had, more VARs are going after the same deals and Tech Data is often pricing the same deal multiple times for all the different VARs that are looking to bid on it, says Dutkowsky.