EMEA kit pile-up hits BrightPoint's profits in Q2

Soon-to-be Ingram subsidiary sees margins eroded

An inventory pile-up in EMEA contributed to distributor BrightPoint slumping to an operating loss in 2012's second quarter.

For the three-month period to the end of June, the Indianapolis-based firm saw global sales increase three per cent year on year to $1.27bn (£813m). Operating losses stood at $4.2m, compared with a profit of $11.8m in Q2 2011. Gross margins have dropped from 7.5 to 6.2 per cent during the past 12 months.

The reduction in profitability was chiefly attributed to a fiercely competitive economic environment in EMEA, and the acceptance of lower margins in an effort to flush out excess inventory across the region. Other factors cited included a reduction in smartphone selling prices in south-east Asia and a weak performance from the distributor's North American wireless business.

US broadline giant Ingram Micro announced last month that it has agreed an $840m deal to acquire BrightPoint.