EMEA gets its groove back for Insight in Q2

CEO salutes European efforts to bring back profitability after Microsoft reward troubles

Insight's EMEA business was the star performer as the reseller giant saw profitability increase on revenue that held firm during a solid second quarter.

For the three months to the end of June, the firm's global turnover was flat at $1.4bn (£831m). Sales were down year on year in North America, but the EMEA top line grew six per cent to $446.9m, although the growth rate in constant currency was only one per cent.

Insight's worldwide net profit increased three per cent to $27.25m, helped by a huge spike in the underlying profitability of its European operations. In EMEA the VAR saw operating profit jump 72 per cent to $9.8m.

The reseller closed the quarter with $733m in total shareholders' equity, compared with $716.9m at the end of the corresponding period last year.

In recent quarters Insight's profitability in EMEA has been hurt by changes to reward schemes in Microsoft's partner programme.

But in an earnings call transcribed by Seeking Alpha, chief executive Ken Lamneck paid tribute to the work done in the region to offset the negative impact. He claimed the top and bottom lines generated by the region so far this year have exceeded his expectations – especially in the UK.

"We are pleased with the progress our EMEA team has been making to improve our sales execution in the challenging demand environment," he said. "The team has executed very well to mitigate the effects of partner programme changes in the software category and have driven improved sales rep productivity and strong hardware sales growth year over year – particularly in the UK business. These trends are expected to continue in the back half of 2014."

Sales growth for the whole year is expected to be "in the low single-digit range", while the fallout from the Microsoft reward shake-up is anticipated to burn a $10m to $15m hole in the company's gross bottom line.