American Power Conversion Corporation (Nasdaq: APCC) announced Q1 revenue of $478.8 million, up 17 percent from $408 million in the first quarter 2005.
On a constant currency basis, total company revenue in the first quarter increased 20 percent year-over-year. Net income for the first quarter 2006 was $14.5 million or $0.07 per diluted share, down 60 percent from $36.0 million or $0.18 per diluted share in the first quarter 2005. “We are strategically investing in the areas where APC solutions are delivering substantial benefits to IT and data center managers, particularly related to the power, thermal and network-critical physical infrastructure (NCPI) demands of server and data center implementation. Our strong top line performance illustrates that our solutions and message are on target with the challenges customers are addressing while implementing new data centers in an always on, high-density world,” said Rodger B. Dowdell, Jr., APC’s president and chief executive officer.
“The end result of these investments was very strong performance across our principal operating segments and solid growth in all major geographies as the company extended its quarterly double-digit year-over-year revenue growth streak to eleven consecutive quarters.
Additionally, InfraStruXure sales continue to provide a growth engine for the company, increasing more than 50 percent year-over-year. However, net income in the quarter declined 60 percent year-over-year primarily due to a year-over-year decrease in gross margin of 7.3 percentage points and a 20 percent increase in operating expenses.”
At 33 percent, gross margin in the first quarter stabilized and increased slightly from the fourth quarter, while year-over-year gross margin declined approximately 7.3 percentage points. Nearly 3 percentage points of the year-over-year decline are associated with price actions and the change in currency.
Additionally, 4 percentage points are attributable to higher operational costs, primarily freight and logistics costs resulting from production shifts to lower cost locations and distribution center transitions.
“Despite the typical seasonal sequential decline in revenue and volume, gross margins stabilized and even increased slightly from the fourth quarter. Additionally, we were pleased to return nearly $90 million to shareholders during the quarter, including approximately $70 million on the repurchase of 3.4 million shares in addition to our regular cash dividend program.”
Loading...