BrightPoint increases its share despite profit dive

Written by: Michael Garwood
BrightPoint increases its share despite profit dive

Distributor says it increased its global market share in the first quarter of the year, despite a fall 71 per cent fall in profits in the three month period

BrightPoint president EMEA Anurag Gupta says the distributor increased its global market share in Q1, despite a 71 per cent dip in profits.

The firm announced its Q1 results at the end of last month, and they showed its net income had dropped by 71 per cent to £1.63 million ($2.64 million), down from £5.7 million ($9.2 million) year on year.

The decrease ends three consecutive quarters of year-over-year profit increases.

The drop came despite a 23 per cent year-on-year increase in revenues to $1.37 billion during the quarter.

BrightPoint blamed certain competitive and economic pressures affecting its customers and vendor partners for the impact on profitability – but it said it expects the situation to improve.

The number of devices handled by BrightPoint quarter over quarter fell by around five per cent – something Gupta blamed on the number of key device launches and also on Christmas, the busiest period of the year.

But Gupta also said it was important to note that the number of handsets BrightPoint handled year on year increased by seven per cent to 29 million – this is despite an industry decline of between 15-20 per cent, meaning it actually gained share.

Gupta said: “When you cut through the noise, we handled over 29 million wireless devices, which was an increase of seven per cent year on year and a five per cent decline quarter over quarter. So we have outpaced the industry growth and actually gained share in the industry.

“There are economic pressures, competitive pressures which all translate into profit pressures, so gross margin was under pressure.

“Our revenue of $1.37 billion beat expectations. And if you look at Q1, there were not many device launches or announcements from our partners. So we were working off the old portfolio.

“Fundamentally, we continue to be positioned very well in the industry. We are announcing many wins and our market share continues to grow.”

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