A big boost in EMEA hardware sales helped resale giant Insight post a solid set of second-quarter numbers.
For the three months to the end of June, worldwide sales were up four per cent annually in dollar terms to more than $1.5bn (£1bn). Operating profit grew two per cent to $55.3m, despite gross margins eroding from 13.4 to 13.1 per cent year on year.
EMEA provided all the top-line growth, with Q2 revenue in the region spiking 14 per cent to almost $460m. Sales in North America and Asia-Pacific were flat at $993m and $76.5m respectively.
The EMEA sales boost was largely attributable to a 31 per cent annual rise in hardware sales, which now represent 30 per cent of the region's top line, up from 26 per cent in the corresponding last year. Software revenue was up eight per cent while services sales, which contribute just one per cent of the total top line, grew 13 per cent annually.
Profitability took a knock in the region during the second quarter, with gross margin down from 14.9 per cent in 2011 to 12.9 per cent this time around. Operating profits dropped 16 per cent to $10.8m.
The EMEA figures for the quarter were boosted by the acquisition of £100m hardware VAR Inmac, which operates in Germany and the Netherlands and was bought by Insight on 1 February.
Stuart Fenton, EMEA president of Insight, told ChannelWeb that more than two-thirds of the EMEA revenue growth had come organically. The firm's software business had perfomed strongly, with the UK doing "incredibly well", he said. Fenton also pointed to networking and tablets as two key sales drivers.
"We saw strength in our Cisco business; we are seeing continued investment in markets in infrastructure technology," he said. "Tablet sales also continue to accelerate, and there seems to be no material cannibalisation of notebook sales. They are looking, at the moment, to be complementary products."
Fenton acknowledged the decline in gross margin, and indicated that "much of that can be attributed to [changes to] partner programmes". The Insight EMEA chief was also in an upbeat mood about his firm's prospects for the rest of the year, and revealed that tin revenues will be further boosted by the launch of a hardware business in France this quarter.
"We are confident that, as a business, we have the right transformational strategy ahead of us. We have had some great success on hardware in Europe, and we expect a continued acceleration in our services," he added.
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