It's the second Tampa Bay corporation in two days to announce global downsizing.
CLEARWATER -- Tech Data Corp. (symbol: TECD) will close its commercial operations in Brazil by the end of the year, a company release says.
“The closure is due to Brazil's complex tax, legal and regulatory environments, which make it difficult for the Company to generate a sufficient return on invested capital,” according to the release.
The Clearwater-based technology distributor will continue to do business with companies headquartered in Brazil, but will handle those transactions as export business, through domestically based facilities located in Miami.
The closure will cost Tech Data between $22 million and $25 million in fourth quarter operating income; between $8 million and $10 million in foreign currency exchange losses; and between $8 million and $10 million in taxes, after tax-deferred assets in Brazil are written off. Those numbers could push the company's combined net losses on the closure up to $45 million for the quarter.
Yesterday, Sykes Enterprises Inc. (symbol: SYKE) announced that it would be drastically reducing its operations in Europe and Africa, foregoing a business segment projected to be worth roughly $50 million in 2011 revenues by year's end.
Despite its new costs, Tech Data stock continues to enjoy gains from the week's strong overall performance from equity markets. Shares are up 10.44% over the past five days, to a price of roughly $50.50 at one point early Friday.
The firm's stock price was also helped by a new $100 million commitment by Tech Data toward a share repurchase program, announced yesterday.