U.S. Markets open in 3 hrs 59 mins

SYNNEX (SNX) Q3 Earnings & Revenues Top Estimates, Rise Y/Y

Zacks Equity Research

SYNNEX Corporation SNX delivered non-GAAP earnings of $3.3 per share for third-quarter fiscal 2019, which improved 31.5% from the year-ago quarter and also beat the Zacks Consensus Estimate of $2.86.

Moreover, revenues of $6.2 billion surpassed the Zacks Consensus Estimate of $5.68 billion and increased 28.6% year over year as well.

Robust organic growth as well as the successful integration of the Convergys business is a key driver. Moreover, management noted that forex did not have much negative impact on the company’s top and the bottom line.

Quarterly Details

SYNNEX’s Technology Solutions revenues were up 16.5% year over year to $5 billion. The shipment of several sizable rollouts and the integration projects that the company won in prior quarters led to the year-over-year increase.

Management mentioned that the major project areas contributing to the company’s growth were PCs, networking and cloud plus software related solutions. The company expects strength in SMB to remain a key catalyst.

Concentrix revenues soared 136% from the prior-year quarter to $1.2 billion, driven by the Convergys acquisition closed last October. New business wins are a positive too. Moreover, the company’s strategy to rebalance its portfolio is an upside.

In the reported quarter, non-GAAP operating income surged 69.5% to $270.5 million. Also, non-GAAP operating margin expanded 105 basis points (bps) on a year-over-year basis to 4.36%.

Non-GAAP operating income for the Technology Solutions was $150 million, up 28% from the year-ago quarter, driven by product mix. Further, non-GAAP operating margin grew 30 bps to 3%

For Concentrix segment, non-GAAP operating income was $121 million, skyrocketing 182% year over year. Additionally, non-GAAP operating margin expanded 170 bps to 10.4%, buoyed by the Convergys consolidation.

SYNNEX Corporation Price, Consensus and EPS Surprise

SYNNEX Corporation Price, Consensus and EPS Surprise

SYNNEX Corporation price-consensus-eps-surprise-chart | SYNNEX Corporation Quote

Balance Sheet and Other Details

SYNNEX ended the fiscal third quarter with cash and cash equivalents of nearly $262.3 million compared with $271.5 million as of the previous quarter.

During the quarter, cash flow from operations totaled approximately $250 million compared with $108 million sequentially.

Guidance

For the fiscal fourth quarter, SYNNEX expects revenues in the range of $5.85-$6.15 billion.  On a non-GAAP basis, earnings per share are envisioned in the band of $3.5-$3.7.

Zacks Rank and Stocks to Consider

Currently, SYNNEX has a Zacks Rank #4 (Sell).

A few better-ranked stocks in the broader technology sector are Rosetta Stone RST, Chegg CHGG and Perficient PRFT, each sporting a Zacks Rank#1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Long-term earnings growth rate for Rosetta Stone, Chegg and Perficient is currently projected to be 12.5%, 30% and 10.8%, respectively.

5 Stocks Set to Double

Each was hand-picked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2020. Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth.

Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.

Today, See These 5 Potential Home Runs >>


Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
 
Chegg, Inc. (CHGG) : Free Stock Analysis Report
 
Perficient, Inc. (PRFT) : Free Stock Analysis Report
 
SYNNEX Corporation (SNX) : Free Stock Analysis Report
 
Rosetta Stone (RST) : Free Stock Analysis Report
 
To read this article on Zacks.com click here.
 
Zacks Investment Research