Insight Enterprises warns over sales and profits dip

Reseller evaluating opportunities to improve EMEA and North American performance

Insight Enterprises has blamed shrinking profit margins in EMEA and faltering US sales for weaker-than-expected Q1 results.

The pan-global reseller won't issue its full financial results for the three months ending 31 March until 1 May, but last night revealed that both sales and profits for the quarter will be down.

Sales are set to fall about five per cent annually to $1.2bn, while earnings from operations will decline to about $17m. This compares with operating income last year of $25.6m.

While weak enterprise sales in North America "significantly" impacted Insight's financial performance, EMEA also took some of the blame after the region suffered a 190-point fall in gross margins. Sales on this side of the pond grew from $349m to $387m year on year.

Insight chief executive Ken Lamneck said: "While EMEA grew top-line revenue, gross margin declined due to changes in business and client sales mix in the quarter.

"Given our recent performance, we are evaluating opportunities to improve our operational and financial performance in North America and EMEA; however, we remain committed to our long-term strategy to expand our capabilities and to invest in key markets."

Insight expects to record about $2.7m of severance and restructuring expenses in its Q1 results after a "re-alignment" of roles led to the elimination of certain positions.