Vendor programme changes take big bite out of Insight's profit

But EMEA boss salutes "market share gains" in Q1 while acknowledging work to be done on margins

Changes to its vendors' partner programmes put a big dent in Insight's bottom line in 2013's opening quarter, particularly in EMEA. But, while acknowledging the work to be done on margins, its regional boss has expressed happiness at the firm's market share gains.

For the three months to the end of March, the reseller giant saw global revenues fall five per cent year on year to $1.2bn (£770m). Gross profit fell seven per cent to $158.1m, but operating income plummeted 44 per cent to $14.4m.

EMEA suffered the most from the decline in profitability, with operating profits sinking 72 per cent annually to $1.18m, despite revenue rising 11 per cent annually to $386.9m. North America also suffered in Q1, with turnover down 13 per cent to $747m and operational income falling 42 per cent to $12.27m.

EMEA managing director Stuart Fenton told CRN that Insight's bottom line has been hurt by the alterations to channel schemes.

"I was pleased with the gains in market share [in Q1], but clearly we have a little bit of work to do in terms of gross margins, [the decline in which is] largely related to partner programmes that have changed year over year," he said.

Insight is projecting full-year 2013 sales to come in slightly below last year, "due primarily to lower spending by large enterprise clients in North America". The numbers for Q2 are expected to "exhibit similar year to year trends as in the first quarter". The company forecasts that the second half of the year will ameliorate its performance as "it begins to realise the benefits of its sales and cost control initiatives".