Insight's EMEA profits fall to $270,000 in Q3

Sales up in the region, but earnings from operations down 74 per cent year on year

EMEA was the worst-performing region for Insight in its third quarter, with earnings from operations in the region down 74 per cent annually to $270,000 (£222,662).

Overall at Insight, net profits jumped annually by four per cent to $21.6m, on sales which over the same period jumped the same amount to $1.39bn. Sales and earnings from operations were up in both the US and APAC, but it was a different story in EMEA.

Earnings from operations in the region dropped 74 per cent annually to just $270,000 on sales over the same period which rose six per cent to $311m. In constant currency, EMEA sales were flat.

Speaking on an earnings call, Insight's CFO Glynis Bryan said: "We haven't seen the growth in revenue in EMEA through the second quarter. What we saw in the third quarter was growth, not in the cloud, but growth in kind of software product business transacted at very low margins for some very large enterprise clients. That happened in every quarter. However, in the third quarter, which was our lowest revenue quarter, it has a bigger impact.

"So we typically have software deals that transact at lower margin related to large enterprise clients. In EMEA on a go-forward basis, you should anticipate that revenue is going to remain a little bit more muted still only because they also have a significant volume of cloud business that is transacted on a net basis, but typically that has translated into higher gross margin."