Brightpoint posts solid revenue, reduced earnings

Brightpoint Inc., the mobile handset distributor that’s rapidly becoming “a global powerhouse,” according to one analyst, posted solid sales for the first quarter of the year, but earnings and gross margins took a hit.
The company said revenue for the quarter was $641.6 million, up 14% over the year-ago quarter, while net income hit $1.9 million, down steeply from $8.9 million in the year-ago quarter. Gross margin was 5.1%, down from 6.4% in the year-ago quarter.
The company said it handled 14.5 million devices during the quarter, up 16% from the year-ago period.
CEO Bob Laikan explained the mixed results as a reflection of the company’s growth strategy, which included the integration of operations from its recent purchase of rival distributor CellStar.
CIBC World Markets analyst Ittai Kidron said that Brightpoint’s revenue beat expectations, while earnings fell below, which he attributed to sell-through of inventory in Asian markets. Motorola Inc. inventory could weigh on second quarter results, Kidron wrote in a note to investors, but the distributor’s long-term outlook is strong.
“We see the now-complete CellStar and pending Dangaard acquisitions as creating a uniquely positioned global powerhouse,” Kidron wrote.
Investors seemed to agree, sending Brightpoint’s stock up almost 10% on the news to $13.95 per share.