Broadline distributor Ingram Micro said its restructuring programme, which has cost $107m (£68m) over the last year, is beginning to pay off.
Greg Spierkel, president of Ingram Micro Europe, said that the Profit Enhancement Programme, which is likely to run for another two quarters, is working.
Last month the company announced a $10.3m loss for the fourth quarter of 2002.
"What we feel good about is the fact that, even with a four per cent year-on-year drop in sales, our profitability went up," he said.
Ingram set aside $140m to help it streamline its operations, aiming to cut costs and increase margins.
Without the restructuring charges during the quarter, profit would have been $29.2m, with a 5.2 per cent increase in sales over the previous quarter.
Spierkel said that Europe had managed to avoid much of the streamlining.
"Most of the cuts have been made in North America, although we have closed down operations in Poland, Portugal and Holland," he said.
Other global cost-cutting measures included outsourcing the company's IT infrastructure to ACS in December last year.
Ingram is also improving credit lines to cash-strapped resellers. "We are reaching out to many more small resellers that we did not touch before, and offering them new credit lines," Spierkel said.
Ingram has increased the number of resellers it works with in the UK by 20 per cent, according to the company.
Des Lekerman, managing director at reseller Eurodata Systems, said distributors played an essential role as finance houses.
"We are getting as much as 60 days credit from some distributors, which is essential because customers are taking 45 days to pay," he said.
"This is particularly important with hardware because you do not make much money on it."
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