Insight 'disappointed' with loss-making EMEA arm in Q3

Channel big-hitter posts mixed set of numbers with European business putting a dent in the bottom line

Insight has expressed its disappointment in the performance of its EMEA business, as third-quarter results show an operating loss stretching towards $4m (£2.5m) on sales that declined five per cent.

For the three months to the end of September the reseller giant saw global revenue fall three per year on year cent to $1.15bn (£717.5m), with operating profit declining 14 per cent to $26.3m. The margin crunch can be almost entirely chalked up to softness in the EMEA region, where turnover dropped five per cent annually to $263.6m. Operating losses in the region stood at $3.8m, compared with a profit of $1.4m in the corresponding period last year.

The much smaller Asia-Pacific business also performed poorly during the quarter, with turnover down 18 per cent to $29.5m and operational earnings falling by almost a quarter to $730m.

Insight's comparatively solid performance in its North American homeland was the one bright spot of the quarter, with sales slipping just one per cent to $857.9m and operating profit rising four per cent to $29.3m.

"In the third quarter, we saw mixed results across our operating segments. In North America, we saw better sales execution and improved profitability and believe that recent investments and the operational discipline we have been driving are beginning to show in our results," said chief executive Ken Lamneck."We are disappointed in the financial results of our EMEA segment and are highly focused on improving our performance in this segment over the coming quarters."

In a conference call accompanying the publication of Q2 results this summer, Lamneck warned that changes to the Microsoft channel incentive programmes would hurt his firm's profitability in the coming months.

Insight's EMEA unit is more software-centric than its transatlantic cousin, having generated 51 per cent of its revenue from software in 2013's third quarter, with 46 per cent coming from hardware and the remaining three per cent from services. In North America the split was 30, 64 and six per cent respectively.