US rivals CDW and Insight report differing results
CDW's UK and Canadian businesses raked in record earnings, while Insight saw global sales decrease
Global reseller titans CDW and Insight both released their Q1 earnings on the same day.
We picked out the key takeaways from each company's earnings reports.
CDW
The US-headquartered VAR reported a 10 per cent rise in overall net sales to $3.6bn (£2.8bn) for its quarter ending 31 March, while net income jumped 20 per cent to $229m.
The UK arm - which is grouped together with the Canadian wing - saw net sales hit $535m in the quarter.
On an earnings call with analysts, CEO Christine Leahy praised the UK team for winning significant public sector deals, adding that clients were leveraging the company's international capabilities and that US to UK referrals grew over 20 per cent in Q1.
She noted that the company has not seen any impact from the initial Brexit date of 29 March.
"In the UK, the team executed really well, capturing March fiscal year-end buying, notwithstanding Brexit uncertainty, and FX wasn't as much of a headwind as expected," she said on the call, transcribed by Seeking Alpha.
"We established a presence on the continent to support CDW UK's broader growth opportunities in the EU.
"This presence also served as a Brexit contingency plan. With the new entity in place, we've expanded our ability to support customers on the continent."
The UK business also benefited from "favourable timing", Leahy added.
"Last year we shared that lead times have extended in certain categories such as netcomm, which caused our backlog to increase to higher than normal levels," she explained.
"In the first quarter, lead times returned to more normal levels, creating a positive flush that we previously had expected to receive throughout the year.
"We delivered excellent top-line growth and profitability in the quarter while continuing to invest in the future and deliver shareholder value.
"These results reinforce the strength of our strategy and power of our business model - underpinned by strong performance across our customer end markets, the breadth of our products and solution portfolio and the ongoing execution of our strategy for growth."
Earlier this year, CDW UK became only the third reseller in the UK to breach the £1bn revenue barrier, after Computacenter and Softcat.
Insight
Results were a little more mixed for Insight, which saw its net sales decrease three per cent year on year to $1.7bn.
The VAR stated that this reflected the decline in hardware sales to enterprise clients.
However, its gross profits increased by three per cent to $248.5m.
Revenue in EMEA increased two per cent to $390m; however, it reported that both hardware and software sales were down eight per cent and four per cent respectively.
Insight attributed the decline in hardware sales to a lower volume of networking solutions to the public sector. The fall in software sales was attributed to migration of applications to the cloud.
"I am pleased to report we have started the new year with strong earnings performance in the first quarter," stated Ken Lamneck, president and CEO.
"Our top-line results decreased in the first quarter against a tough comparison last year, but we focused on profitable business, growing our services sales and helping our clients migrate to the cloud, which led to strong gross margin expansion in the quarter.
"At the same time, we controlled our expenses, which allowed us to deliver another quarter of double-digit earnings growth year over year, with each of our operating segments contributing to these results."