On the conference call with analysts, there wasn’t much clarification from Brightpoint. The company doesn’t forecast sales, and when a caller pressed management, the reply from chief executive Robert Laikin and company was simply, “We believe the third quarter [i.e., for revenue] will be slightly up sequentially and we think the Fourth Quarter is always the strongest quarter of the year.” Sounds good. So, later, when a caller pestered Laikin some more regarding AT&T’s purchase of Dobson Communications Corp. (DCEL), announced June 29, and Verizon’s purchase of Rural Cellular Corp. (RCCC), announced last week, the response was the following:
Yeah, well those are both important customers of ours and they will have an impact, but in this industry that’s something that we’ve experienced before and so our focus is on new Business Development, new opportunities and also driving some of the cost out of the business so we can mitigate the impact that either of those will have if and when they close.
Which doesn’t necessarily set the mind to rest. I’ve been a big believer in Brightpoint recently, penning a glowing piece on them back in April. My thought then, and now, is that despite worries over the fallout from Motorola (MOT), the company will end up being a very significant player in the cell phone business. There are still plenty of worries about the company’s narrow gross profit margins, worries over integration of the Danish firm Dangaard, which it acquired last month, and costs the company has to absorb as various customers in cellular flame out and leave the company holding the bag for work in progress. But I still think the company is on the right track, and the stock will reflect that at some point.
Brightpoint shares, after falling as low as $11.95 Wednesday evening, regained a little bit of ground, to $12.25, still a 6.27% drop from the $13.07 close. I would note the shares were up more than 6% at one point during normal trading.
CELL 1-yr chart: