Insight profits nosedive

Foreign exchange losses wiped nearly $900,000 off Insight Enterprises bottom line during a third quarter that saw profits dive 26% as demand softened globally.

Foreign exchange losses wiped nearly $900,000 off Insight Enterprises bottom line during a third quarter that saw profits dive 26% as demand softened globally.

For the period ended 30 September revenues rose 5% to $1.17bn but profits fell to $6.7m. The currency issues resulted from a rising dollar in relation to the Euro but were partially offset by a tax benefit.

"In our third quarter the demand environment for IT solutions continued to be challenging and the overall economy worsened, especially in September," said Insight Enterprises boss Rich Fennessy.

Operating expenses were 11.5% of revenues and Insight said it reckoned it could shave net op-ex by around 6% this quarter equating to $20m, specifically from its North American business on the back of new infrastructure systems and other reductions.

"In this current environment we must continue to be aggressive in ensuring we decrease our base cost infrastructure and discretionary spending levels going into next year," he added.

Sales in North America went up 5% to $854.7m, 6% in EMEA to $281m and APAC grew revenues 20% to $32.8m.

Hardware sales went up 1% in North America, while software and services grew 2% and 126% respectively. In EMEA, hardware sales fell 1% but software revenues increased 13% and services flew 57%.

Fennessy set aside special mention for EMEA and in particular efforts to drive software sales to SMEs, a strategy it will continue in the current quarter as the sluggish hardware market continues.

The current climate was "unprecedented" he added which made forecasting sales for the current quarter and into 2009 very difficult.

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