Brightpoint Renews Sprint Contract - Analyst Blog

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Brightpoint North America L.P, an operating arm of a leading distributor of wireless devices, Brightpoint Inc . ( CELL ), recently announced that it has renewed its contract with Sprint United Management Company, a subsidiary of Sprint Nextel Corp. ( S )

Therefore, Brightpoint will continue to provide logistics assistance to Sprint's different groups of prepaid retail service providers like Boost Mobile, Virgin Mobile and Assurance Wireless brands. Other services under the contract include the receiving of orders from customers and proper delivery of the ordered goods. Additionally, Brightpoint will also offer warehousing and customer credit facilities to different customer groups.

However, Brightpoint is currently witnessing various challenges, which has induced the company to reduce its financial forecast for fiscal 2012. This is the second time that the company has lowered its 2012 financial guidance, which was provided at the end of 2011. The loss of a major client in the company's high-margin Logistics segment in the U.S is the reason for the weakness. Moreover,global economic volatility and weaker margins on product sales coupled with the recent trend of consolidation among telecom carriers may act as negative catalysts for the company in the long term. We, thus, maintain our long-term Underperform recommendation onBrightpoint Inc.

Currently, Brightpoint Inc. has a Zacks #5 Rank, implying a short-term Strong Sell rating on the stock.

Brightpoint Inc. is a leader in the global distribution of wireless devices and the provision of customized logistic services to mobile network operators, mobile virtual network operators (MVNO), resellers, retailers and wireless equipment manufacturers.


 
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: Investing , Business , Stocks

Referenced Stocks: CELL , S

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