Systemax Inc. Earnings Cheat Sheet: Double-Digit Quarterly Profit Growth

Systemax Inc. (NYSE:SYX) reported net income above Wall Street’s expectations for the first quarter. Systemax, Inc. is mainly a direct marketer of brand name and private label products. Its operations are organized in three reportable business segments: Technology Products, Industrial Products and Software Solutions.

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Systemax Earnings Cheat Sheet for the First Quarter

Results: Net income for Systemax Inc. rose to $13.6 million (36 cents/share) vs. $11.8 million (31 cents/share) in the same quarter a year earlier. A rise of 15.4% from the year earlier quarter.

Revenue: Rose 1.6% to $929.9 million YoY.

Actual vs. Wall St. Expectations: SYX beat the mean analyst estimate of 30 cents/share. Estimates ranged from 28 cents per share to 32 cents per share.

Quoting Management: Richard Leeds, Chairman and Chief Executive Officer, said, “We had a solid start to 2011 that underscores the channel, product and geographic diversity that define Systemax. Our Technology Products business to business operations continue to perform well, particularly in Europe as the business climates in most of our locations appear to have stabilized. In addition, the Industrial Products group had another outstanding quarter, delivering strong double digit growth from product expansion and other growth initiatives. Consumer channel results were soft, reflecting the choppy economic environment; however, we did see improvement in our performance as we moved through the quarter. We are also beginning to see encouraging signs from the strategic initiatives we have underway to improve our margins performance. In fact, gross margins for the first quarter improved on both a year ago and sequential basis. Operating margins declined due to investments in business to business operations, including the addition of sales heads and costs related to new stores and the new distribution center for the Technology Products segment. Overall we are well positioned with a solid balance sheet, which provides us tremendous financial flexibility and a deep management team that is committed to building long-term value for our shareholders.”

Key Stats: Last quarter’s profit increase breaks a streak of two consecutive quarters of year-over-year profit decreases. In the fourth quarter of the last fiscal year, net income fell 30.8% while the figure dropped three quarters ago.

Over the last five quarters, revenue has increased 11.3% on average year over year. The biggest increase came in the first quarter of the last fiscal year, when revenue rose 21.7% from the year earlier quarter.

Competitors to Watch: PC Mall, Inc. (NASDAQ:MALL), PC Connection, Inc. (NASDAQ:PCCC), Gaiam, Inc. (NASDAQ:GAIA), BIDZ.com, Inc. (NASDAQ:BIDZ), Stamps.com Inc. (NASDAQ:STMP), Bluefly, Inc. (NASDAQ:BFLY), Overstock.com, Inc. (NASDAQ:OSTK), The Parent Company (KIDSQ), U.S. Auto Parts Network, Inc. (NASDAQ:PRTS), Best Buy (NYSE:BBY), Target (NYSE:TGT), RadioShack (NYSE:RSH), Apple (NASDAQ:AAPL) and ValueVision Media, Inc. (NASDAQ:VVTV)

Stock Performance: Shares of SYX closed up 3% to $13.10 per share today:


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