Tag: results

Insight’s EMEA loses money again

651d40634c7c4346f3f104a1ff612807_XLInsight has had a bad quarter ending 30 September with the numbers mostly dragged down by its EMEA earnings.

Worldwide earnings from operations for Insight reached $22.4 million, up four percent year on year on revenues that enjoyed 26 percent growth to $1.76 billion on the corresponding quarter last year.

But Insight’s EMEA region was not so lucky after a bad year. It was recovering from a €3.2m restructure carried out in the first three months of the year which resulted in the firm posting a $1.13 million operating loss. The second quarter saw operating profits grew 19 percent annually to $69.32 million but this was not sustained.

While the firm’s North American and APAC regions did well EMEA revenues declined two percent year on year in constant currencies to $312.19 million for the quarter, while posting a $2.14m operational loss. Gross profits – which Insight believes better represents its bottom line since cloud sales are reported as net earnings – saw a nine percent boost in EMEA to $41.62 million.

Insight blames the firm’s acquisition of Caase.com, which EMEA boss Wolfgang Ebermann described vital if Insight wanted to get into digital transformation and spruce up its German and Dutch operations.

In July, Insight sold off its Russian arm to $1.5billion turnover VAR giant Softline, which comprises the business of 250 customers.

CEO Kenneth Lamneck explained that “this market did not exceed our long-term plans”.

Hardware revenues accounted for 44 percent of EMEA sales in Q3, up from 41 percent logged in the same quarter of 2016. Software sales declined by six percent to 52 percent of revenues, while services peaked a modest one percent to account for four percent of its EMEA top line.

A similar story emerged across North America and APAC, where hardware revenues increased by six per cent to 68 percent of regional sales, and five percent to 21 percent of sales respectively.

Speaking on the same earnings call, Lamneck claimed that all major VARs were experiencing healthy hardware sales this quarter as a result of higher component costs.

“The [device] market was pretty healthy this quarter as we look at the… data across the channel for everybody,” he said.

RedstoneConnect getting mixed results


BHd68l8RedstoneConnect is changing its business model and seeing mixed results in its bottom line.

According to the outfit’s results, it significant revenue growth for its smart building software which was up 194 percent to £1.7 million; and managed services businesses, up 18 percent to £9.1 million, in the first six months of FY18.

While this is not bad it did not offset a 26 percent decline in turnover from its systems integration activity, down to £9.2 million from £12.5 million in the period.

Some of RedstoneConnect’s numbers are due to the timing of income from some of its larger contracts and so there is little sign that the company is in trouble.

In fact, chief executive Mark Braund is rubbing his paws expectantly seeing  designing infrastructure for smart buildings as a core part of the business.

Overall group revenue slipped three per cent year on year to £20m, with adjusted EBITDA up 12 per cent to £1 million. The company’s net loss widened to £867,000 from £485,000, with acquisition and integration costs associated with the Anders+Kern buy for £1.4 million in cash and the ongoing expenses related to the development of the software division taking their toll.

However, contracts for the deployment of in-building cellular (IBC) and distributed antennae system (DAS) infrastructure and services at two major London banks are set to boost its 2H18 and 1H19 turnover, while management remains confident that similar deals are in the pipeline.

Mark Braund, CEO of RedstoneConnect, said the firm has performed well in the first half of the year, with trading momentum weighted towards the second half.

“We continue to see good traction for our software solutions alongside our infrastructure and managed services capabilities, which is improving both the predictability and quality of our earnings”, he said.

“The integration of A+K is now complete and is contributing positively to the business, not only through the addition of services to the group, but also the diversification of our routes to market for our existing products and IP.

“Coupled with our continued investment in product development across our software solutions division, we anticipate the next 12 months will be an exciting time for RedstoneConnect.”




Capita does a U turn

4e1c55e8ea626edb781355e5ac47ca51--small-cars-naples-italyCapita’s IT services division managed to turn itself round in the first half of this year and get back to black. However, the rest of the company is not looking so hot.

Overall Capita business saw an underlying revenue decline of three percent to £2.07 billion.

The drop in revenue saw Capita’s share price fall by over 11 percent on the London Stock Exchange.

Underlying operating profit however jumped 38 percent to £228.4 million, attributed to “a significant improvement” in the IT services division.

CEO Andy Parker stepped down last week to spend more time with his family just before the news was announced.

Nick Greatorex, interim CEO at Capita, said: “In the first half of 2017, we made good progress on executing the plans laid out at the end of last year to reposition the group.

“We announced the sale of our asset services businesses, completed the disposal of our specialist recruitment business and commenced a number of cost initiatives.

“We remain confident that these actions are making Capita a simpler business, well positioned for the future under new leadership.”

Despite the broader business struggling, Capita was optimistic about the turnaround of its IT services division.

The IT division was held responsible for Capita’s first ever profit warning last year, and was a key factor in Parker announcing his departure in March after the outsourcer’s full-year profits fell £100 million  in 2016.

However in H1 Capita saw revenue for the division up 13.6 percent to £273.9 million

Capita said: “The turn-around of our IT services division progressed better than expected, following restructuring of the management team and operating model, but we continued to be impacted by weakness in a number of discretionary services.

“We improved our major contract win rate in a relatively subdued business process management market in the public sector.”

Ericsson sulks over results

ericsson-logoEricsson President and CEO Börje Ekholm had a Nordic sulk over his companies results and said he was not satisfied with the outfit’s underlying performance.

Ericsson saw continued declining sales and increasing losses in the quarter and while its brand new business strategy was gaining traction, there will need to be some costs cut.

“We will accelerate our actions to ensure that we can meet our target of doubling the 2016 operating margin beyond 2018. Actions will be taken primarily in service delivery and common costs and do not include R&D,” he said.

Sales adjusted for comparable units and currency declined by 13 percent. Based on the development in the first half of the year, Nokia’s current view of the Radio Access Network (RAN) equipment market outlook is in line with external estimates of a high single-digit percentage decline for the full year 2017.

“Considering the current market environment, the company position, and the more focused business strategy, we continue to assess risk exposure in ongoing contracts. Depending on the outcome, we see an increased risk of further market and customer project adjustments, which would have a negative impact on results, estimated to SEK 3-5  billion. for the coming 12 months, of which 30 percent is estimated to impact cash,” Ekholm said.

The decline in the Networks result in the quarter was mainly caused by lower software sales, driven by two key factors; unusually strong software sales in the second quarter last year and cautious mobile broadband investment levels. On the positive side, Ericsson did well in radio.

He said that Ericsson will improve its Networks will be generated through both the continued ramp-up of Ericsson Radio System (ERS) and cost reductions, mainly in service delivery. The ERS continues to prove its competitiveness and now represents 49 per cent  of radio unit deliveries in the quarter. During the quarter, we announced a break-through contract to support Vodafone UK to evolve its 4G network and to provide 5G radio technology. To safeguard a future leading portfolio, we have started to increase R&D investments in Networks.

“In line with our more focused strategy, we signed an agreement in the quarter to divest the power modules business.”

IT & Cloud had another challenging quarter with significant losses. The sequential increase in losses is largely explained by lower capitalization of R&D expenses. Gross margin continued to be negatively impacted by large digital transformation projects, he said.

Sales decreased by eight percent. The RAN equipment market for 2017 is estimated to show a high single-digit percentage decline compared with previous estimate of two to six percent.

Gross margin, excluding restructuring charges, was 29.8 percent. Operating income was $140 million.


Infosys first quarter revenues grew 3.2 percent

infosysudacityOutsourcing King Infosys saw its first quarter revenues grow sequentially by 3.2 percent with a six percent improvement on last year.

The outfit announced that its revenues were $2,651 million for the quarter ended June 30, 2017 and its operating profit was $638 million for the quarter ended June 30, 2017.

Infosys CEO Dr. Vishal Sikka said that the company’s focus in Q1 is reflected in broad-based performance on multiple fronts- revenue growth, resilient margins despite multiple headwinds, healthy cash generation and overall business results.

“I am encouraged by the uptick in revenue per employee for six quarters in a row, and the strong momentum in our new high growth services and software, as we accelerate our focus on innovation-led growth. The widespread adoption of our grassroots innovation and education initiatives continue to fuel our transformation, and I am proud to see Infoscions embrace and drive Infosys towards becoming a next-generation services company.”

The company saw broad-based growth across geographical and industry segments and the bottom line was helped by new services and software offerings.

Company Revenues are expected to grow 6.5 percent to 8.5 percent and the moves towards automation and innovation such as Cloud Ecosystem, Big Data and Analytics, API and Micro Services, Data and Mainframe Modernisation, Cyber Security and IoT Engineering Services will grow.

Infosys is also expecting good things from its next-generation AI Platform Nia which was launched in April.

Dell hit by increasing component costs

Dell logoGrey box shifter Dell said it is pleased with its maiden results under its new go-to-market structure, even if it was kicked in the nadgers by rising component costs.

The Texas-based giant posted an operating loss of $1.5 billion on revenues of $17.8 billion.

Dell’s Client Solutions Group saw revenue rise six per cent year on year to $9.1 billion and operating income of $374 million.

Dells Infrastructure Solutions Group made $6.9 billion revenue, made up of $3.2 billion from servers and networking. This was a five per cent annual rise. It also made $3.7 billion from storage.

ISG’s profitability was hit by a spike in the cost of components such as memory, some spot prices for which Dell said have doubled over the last year. Operating income for this division fell to $323 million, with operating margin tumbling to five per cent, down steeply from 12 percent the previous quarter.

Dell Technologies CFO Tom Sweet said he was happy with the overall results in the first quarter of our new go-to-market structure

On a first quarter conference call, Dell Technologies president David Goulden said that although the vendor had tried to make the cost increases stick in the channel and its rate prices, this had not always been possible.

“Customers don’t like paying more [than] what they paid last quarter – that typically not being the case in IT. Typically, in the IT industry, there are expected price decreases on a sequential basis, not price increases.”

Memory spot prices had doubled year on year, with SSD component costs also up 20 percent or more.

Goulden added that the component cost hikes have been most acute in servers, where he said that Dell had gained on its closest competitor.

“A certain amount of the pricing increase will actually stick and yield the incremental return, others will not, because the customer either won’t go there, or somebody else in the market hasn’t increased their price and you wind up in a competitive environment.”


Accenture’s outlook below expectations

accenture-surfing-elephantConsulting and outsourcing services outfit Accenture slightly raised its full-year profit forecast, but the revised outlook was still below market expectations.

Accenture has invested heavily in its digital and cloud services, amid stiff competition from Cognizant and Biggish Blue.

Revenue in its consulting unit, which has a higher profit margin than its outsourcing business, increased 2.6 percent in the second quarter its slowest growth in more than a year.

Chief Financial Officer David Rowland told the press that he plans to write $1.5 billion cheques for acquisitions in the year ending August.

Accenture said it expects adjusted profit of $5.70 to $5.87 per share for its year ending August, slightly higher than its prior forecast of $5.64 to $5.87 per share.

However, the company narrowed its full-year revenue forecast growth range to 6 percent to 8 percent in local currency, from its earlier 5-8 percent range.

The new forecast points to revenue of between $34.86 billion to $35.51 billion.

Analysts on average are expecting a profit of $5.87 per share and revenue of $34.60 billion.

Accenture said second-quarter net revenue rose 4.7 percent to $8.32 billion, as it benefited from strong demand for its digital, cloud and security-related services, which made up more than 45 percent of revenue.

Net income attributable to Accenture fell to $838.8 million in the quarter, from $1.33 billion last year.

Profit in the year-ago quarter received help from a $553.6 million gain on the sale of some businesses.

The company’s profit in the second quarter was hurt in part by a higher tax rate and increased operating costs, up 4.3 percent to $7.62 billion.

Analysts on average had expected revenue of $8.34 billion.

Computacenter did OK in a miserable UK

boris-parachuteComputacenter  has issued an interim statement for 2016 where it said that it had done OK in a miserable period of UK history.

Computacenter said it had a lot to be happy about with a strong pipeline of managed services opportunities.  The channel giant said that the 12 months ending 31 December had been ok overall the Group’s numbers will be in line with board expectations.

Group revenue was up by six percent for the year, service turnover improved by five percent and supply chain revenue was up by seven percent. Currency falls had been a real killer. Currency fluctuations with the pound and the dollar have been felt strongly in the UK, with some vendors increasing prices over the last few months and, not surprisingly, the numbers from Computacenter for the performance of this country were slightly down on last year.

UK revenue was down a percent, services dropped by eight percent  with supply chain on the rise by three percent – some of that was as a result of a particularly strong Q4.

The outfit did much better in Germany with three percent growth and services up by seven percent and supply chain by one percent.

“We are encouraged by our performance in 2016 in Germany and pleased with the progress we have made in France. In the UK, the second half performance has been in line with our revised expectations, set at half year after a disappointing first half performance,” stated the firm in the update.

“We expect 2017 to be another year of progress for the Group as we continue our momentum in Germany, maintain our position in France and marginally improve on our 2016 performance in the UK. While in the UK we are reliant on a small number of large opportunities, our Managed Services pipeline across the Group is strong,” the statement added.

Sophos improves revenue but makes more losses

sophos-HQUK insecurity outfit  Sophos today reported its interim results which showed that while revenues continued to rise, losses also widened.

Revenue increased to $256.96 million in the six months, up from $234.2 million in the same period last year. Sophos said its billings were up 15 percent while new customer billings were up 20 percent.

That still meant that it had an operating loss of $24.6 million which was an increase from $13.4 million from last year.

Sophos blamed the increased losses on investment into R&D, as well as a continued shift towards subscription-based billing.

Investors appeared largely satisfied first six months of results. The share price crept up by one percent today to 235 pence per share.

Kris Hagerman, chief executive officer said that he was pleased with Sophos’ first half results. They were in-line with Sophos’ outlook, and he was especially pleased with our cash flow performance which was ahead.

“As we enter the second half of the fiscal year we expect continued strong growth, as we benefit from key new product releases in next-generation endpoint and next-generation firewall, and the continued momentum of our Sophos Central cloud management platform,” Hagerman said.

For the year-ending 31 March 2017, the firm said that it expects to deliver mid-teens revenue growth whilst delivering ‘modest’ cash EBITDA margin expansion.



Cheap tablets killing the sector


cheap-tabletsBeancounters at IDC claim that a flood of cheap tablets are killing off an already dying technology branch.

In a new report, IDC said that 43 million tablets shipped in Q3 2016 but that figure was actually the bad news.  The overall market declined 14.3 percent year-on-year, because of poor sales at the top end of the market. Basically consumers switching to cheap tablets with lower margins.

While there is a .8 percent quarter-on-quarter increase in shipments as vendors get ready for the holiday quarter. the market’s pants.

Amazon with its Fire tablets were the only tablets to see significant growth.  These were up 320 percent year-on-year but still only taking 7.3 percent of the market. Huawei sales increased 28.4 percent to 5.6 percent of the market.

Apple’s shipments fell 6.2 percent and Lenovo was down 10.8 percent. Samsung fell 19.3 percent.

Vendor 3Q16 Unit Shipments 3Q16 Market Share 3Q15 Unit Shipments 3Q15 Market Share Year-Over-Year Growth
Apple 9.3 21.50% 9.9 19.60% -6.20%
Samsung 6.5 15.10% 8.1 16.00% -19.30%
Amazon 3.1 7.30% 0.8 1.50% 319.90%
Lenovo 2.7 6.30% 3.1 6.00% -10.80%
Huawei 2.4 5.60% 1.9 3.70% 28.40%
Others 19 44.20% 26.9 53.20% -29.20%
Total 43 100.00% 50.5 100.00% -14.70%

IDC senior research analyst Jitesh Ubrani said that they -$200 tablets were spoiling the market for everyone.

He said that the “The race to the bottom is something we have already experienced with slates and it may prove detrimental to the market in the long run as detachables could easily be seen as disposable devices rather than potential PC replacements”

Weak pound gives Computacenter a temporary lift

boris-parachuteThe weak pound helped Computacenter’s bottom line by boosting the value of its business in mainland Europe.

The London-listed firm reported a two percent year-on-year rise in turnover to £735 million, more than £400 million of which was generated in Germany and France. Group services revenues grew by four percent as reported and the supply grew one percent.

The UK side of the business was as soft as a baby’s bottom but thanks to Brexit sinking the pound that hardly got noticed.

Sales were down three percent to £314 million, including a ten percent slump in services revenues. However the supply chain grew two percent.

“We are pleased to see a return to growth in our supply chain business, however, as broadly anticipated, our services revenue remains challenged principally due to the buoyant nature of projects in 2015,” the firm said.

In Germany things were much better. Revenues grew eight percent as reported to £325 million, but decreased two percent in constant currency. Service revenue was up 22 percent and the supply chain increased two percent.

France which normally was a blackspot on Computer Center’s revenues grew three percent to £83 million. Services and product sales also benefited from the currency translation.

Group funds totalled £96.7 million at the end of the quarter, up £29 million on the same period a year earlier.

The company forecasted sales of £3.1 billion for 2016, which would equate to a three percent rise as reported.

Softcat gets the cream

fatter catChannel outfit Softcat is reporting some rather good figures for its first public full year.

The channel player reporting strong results and a £28m special dividend. The firm saw a 12.8 percent  increase in revenues to £672.3m and gross profit coming in at 17.5 percent up on last year at £120.7 for the year  ended 31 July. That gross profit number was helped by a one-off procurement saving of £3.4m.

Softcat saw a 7.5 percent  increase in customer numbers and increasd its staff by 21 per cent to support its growth plans.

The channel outfit went public in November last year and the share price has consistently outperformed the initial valuation.

Martin Hellawell, Softcat CEO, said that the last financial year had seen it open an office in Glasgow, add 133 to the workforce and pick up a clutch of best partner awards from leading vendors.

“We are pleased to report continued strong organic growth at Softcat with 12.8 per cent revenue growth, 17.5 per cent growth in gross profit and 15.2 per cent growth in adjusted operating profit, achieved against a backdrop of very modest growth in the UK economy which has equally been reflected in the IT market,” he said.

“We have continued to win large numbers of new customers and earn increased spend from our existing customers.  This has been achieved by our relentless focus on customer service, which is in turn driven by an excellent and engaged team of people at Softcat,” he added.

Dixon Carphone plays down Brexit worries

carphone-warehouseDixon Carphone attempted to play down the personal impact of market volatility that a post-Brexit vote will “inevitably” cause.

Dixon Carphone CEO Seb James talked bullishly about the business and its prospects but noted that things could get a bit edgy since Friday’s EU referendum.

“The nation has spoken and there has been a vote to exit the EU in due course. As you can imagine, we have been giving some thought to this,” he said.

“Our view is that, as the strongest player in our market and despite the volatility that is the inevitable consequence of such change, we expect to find opportunities for additional growth and further consolidate our position as the leader in the UK market,” said James.

Dixon Carphone said group sales edged up three per cent year-on-year to £9.78bn for the year ended 30 April. Sales in its UK heartland went up one per cent to £6.4bn, reflecting stores closure.

Demand for white box goods offset weaker trade in computing, TV sales benefited from the Rugby World Cup last year it said. The mobile element saw market share gains helped by the store within a store concept, the launch of a 4G network branded iD and lasting benefits of Phones4You going pop in the prior financial year, the company said.

Connected World Services jumped to £152m from £121m. Dixon has a deal to roll out CWS in Sprint stores across the pond.

Profit for the year was £337m, up from £285m in the prior financial year.


Vodafone is back in the money

vodafoneBritain’s Vodafone posted a rise in its quarterly sales for the first time in nearly three years.

This was thanks to improving trends in its key European markets and demand for its 4G mobile services.

The world’s second largest mobile operator said the rise in fourth quarter revenue of 0.1 percent, which followed 10 quarters of declines, meant that its overall earnings could also stabilise in 2016.

Vodafone has been hit hard by the constraints on consumer spending in its big European markets and by regulator-imposed price cuts, forecast a range for 2015-16 earnings of £11.5 billion pounds to “£12 billion.

Compared to the £11.9 billion pounds it reported for the 2014-15 period the company could be heralding a return to growth following seven straight years of earnings decline.

Analysts say Vodafone has a tendency to set a cautious outlook so the figures might even be better than that.

Chief Executive Vittorio Colao said the company had seen increasing signs of stabilisation in many of its European markets, supported by improvements in its commercial execution and very strong demand for data.

Vodafone has 446,000 mobile customers in countries ranging from Albania to Spain, Qatar, India, South Africa and New Zealand. However, in the EU, customers cut back on using their phones at a time when Vodafone needed to invest in new networks.

With growth also slowing in its emerging markets, Vodafone embarked on a programme to either build or buy superfast fixed-line broadband networks to compete with rivals offering mobile contracts alongside television, broadband or fixed-line deals.


Red Hat does better than expected

red-hatRed Hat has surprised the cocaine nose jobs of Wall Street by being able to stick to its profit forcast, despite the US dollar shooting through the roof.

Red Hat predicted it would make a profit for the first quarter that matched analysts’ estimates despite warning on a strong dollar hurting its revenue.

Red Hat shares were up five percent in after-market trading after the company’s profit beat the average analyst estimate for the eighth straight quarter.

The company also said a $500 million share buyback program will replace an existing $300 million programme.

Red Hat gets nearly half its revenue from international operations and expected to suffer from the US dollar’s strong gains. HP, Microsoft and IBM had estimated a significant impact from the dollar’s gains.

The company, whose customers include Adobe and Verizon, forecast an adjusted profit of $469 million-$474 million for the first quarter.

Red Hat also forecast a revenue of $1.99-$2.02 billion for the full year. Analysts were expecting  revenues of $2.02 billion.

The company’s billings revenue was $688 million in the fourth quarter. Analysts had expected $646.2 million.