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Insight Enterprises Inc. Reports Operating Results (10-Q)
Posted by: gurufocus (IP Logged)
Date: May 3, 2012 06:57AM

Insight Enterprises Inc. (NSIT) filed Quarterly Report for the period ended 2012-03-31. Insight Entrprs has a market cap of $895.7 million; its shares were traded at around $20.37 with a P/E ratio of 9.8 and P/S ratio of 0.2. Insight Entrprs had an annual average earning growth of 7.1% over the past 5 years.



Highlight of Business Operations:

Although sales growth year over year softened somewhat in the three months ended March 31, 2012, we delivered gross margin expansion, and our significant operating leverage again drove double-digit growth in earnings from operations during the first quarter of 2012. Consolidated net sales increased 2% to $1.24 billion in the three months ended March 31, 2012, an increase of $24.3 million compared to the three months ended March 31, 2011. Gross profit for the three months ended March 31, 2012 increased 5% year over year to $170.4 million, and gross margin increased 40 basis points to 13.7%. On a consolidated basis, we reported earnings from operations of $25.6 million, net earnings of $17.4 million and diluted earnings per share of $0.39 for the first quarter of 2012. This compares to earnings from operations of $22.9 million, net earnings of $13.1 million and diluted earnings per share of $0.28 for the first quarter of 2011.

Net sales in North America increased 1%, or $9.3 million, for the three months ended March 31, 2012 compared to the three months ended March 31, 2011. Net sales of software increased 9% year over year, while net sales of hardware and services decreased 1% and 10%, respectively, year to year. The software growth was driven by increased demand for office productivity applications in the large enterprise client group, partially offset by lower software spending by public sector clients. Hardware and services sales comparisons continued to reflect large client deployments in the prior year period that concluded in the second half of 2011 that were not completely replaced in the first quarter of 2012 by new client engagements.

Net sales in EMEA increased 4%, or $11.9 million, in U.S. dollars, for the three months ended March 31, 2012 compared to the three months ended March 31, 2011. Excluding the effects of foreign currency movements, net sales increased 7% compared to the first quarter of last year. Net sales of hardware were up 22% year over year in U.S. dollars, 25% excluding the effects of foreign currency movements, with approximately two thirds of the growth being contributed by the acquisition of Inmac effective February 1, 2012 and one third being the result of organic growth, primarily in the middle market client space. Software net sales decreased 8% year over year in U.S. dollars, 4% excluding the effects of foreign currency movements, due primarily to lower volume with existing clients in certain markets and certain transactions moving between quarters. Net sales of services increased 17% year over year in U.S. dollars, 22% excluding the effects of foreign currency movements, due primarily to higher volume and new client engagements.

North America’s selling and administrative expenses decreased 1% for the three months ended March 31, 2012 compared to the three months ended March 31, 2011 and, as a percentage of net sales, decreased 20 basis points to 10.7%. Excluding a non-cash charge of approximately $1.4 million to write-off certain computer software development costs recorded in the first quarter of 2011, selling and administrative costs increased 1%, or $793,000, year over year. This increase is due to investments in headcount and higher medical and other benefits expenses in the three months ended March 31, 2012, which were partially offset by decreases in other areas.

EMEA’s selling and administrative expenses increased 11%, or $4.3 million in U.S. dollars, for the three months ended March 31, 2012 compared to the three months ended March 31, 2011, increasing approximately 80 basis points year over year as a percent of net sales to 13.0%. Excluding the effects of foreign currency movements, selling and administrative expenses increased 14% compared to the first quarter of last year. Approximately $2.4 million of the increase can be attributed to the acquisition of Inmac effective February 1, 2012, and the remainder of the year over year increase was primarily driven by increases in salaries and benefits due to investments in headcount.

Read the The complete Report



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