Still Neutral on Brightpoint - Analyst Blog
September 14 2012 - 12:50PM
Zacks
Brightpoint Inc.
(CELL) posted mixed financial results for the second quarter of
2012. The company has slowly started gaining new orders, which may
partially offset the loss of a major client of the company’s
high-margin Logistics segment in the U.S. However, broader
worldwide macro-economic volatility remains as a major near-term
concern. In the second quarter of 2012, gross margin, operating
margin, and net margin dropped 1.3%, 0.8%, and 0.4% year over year,
respectively.
On July 2, 2012, Brightpoint Inc.
has entered into a definitive agreement with Ingram Micro
Inc. (IM) through which Ingram Micro will acquire all of
the outstanding shares of Brightpoint common stock for $9 per share
in cash. The transaction is valued at approximately $840 million,
including the value of around $190 million of Brightpoint’s net
debt as of June 30, 2012. However, the acquisition is subjected to
certain terms and conditions and is expected to be completed before
the end of this year.
Management has revised its
financial outlook downward twice for fiscal 2012 in the last eight
months due to a major client loss and macro-economic fluctuations.
The market has become intensely competitive. Recent consolidation
trend among wireless operators may also become a long-term negative
for the company. We believe Brightpoint is currently fairly valued
and, thus, reaffirm our Neutral recommendation.
Nevertheless, the impetus for
continued financial improvement remains Brightpoint’s diversity, as
the company provides a full range of sales & distribution,
logistics, and activation services while expanding on a global
basis. The company enhanced its portfolio of product offerings for
customers, while developing new sales channels for its
suppliers.
BRIGHTPOINT INC (CELL): Free Stock Analysis Report
INGRAM MICRO (IM): Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research
Ingram Micro A (NYSE:IM)
Historical Stock Chart
From Jun 2024 to Jul 2024
Ingram Micro A (NYSE:IM)
Historical Stock Chart
From Jul 2023 to Jul 2024