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SYNNEX (SNX) to Report Q2 Earnings: What's in the Cards?

Zacks Equity Research

SYNNEX Corporation SNX is slated to release second-quarter fiscal 2019 results on Jun 25.

Notably, the company’s earnings surpassed the Zacks Consensus Estimate in each of the trailing four quarters, the average being 5.99%.

In the last reported quarter, the company delivered non-GAAP earnings of $2.84 per share, which surged 33.3% from the year-ago period and also beat the Zacks Consensus Estimate of $2.75.

Revenues of $5.3 billion matched the Zacks Consensus Estimate but increased 17% year over year. Adjusted for foreign exchange, revenues rose 18% in the quarter.

What to Expect in Q2

For the fiscal second quarter, SYNNEX expects revenues in the range of $5.4-$5.7 billion. The Zacks Consensus Estimate is pegged at $5.53 billion, suggesting 11.3% improvement from the figure reported in the year-ago quarter.

Non-GAAP earnings per share are projected in the band of $2.62-$2.78. The Zacks Consensus Estimate stands at $2.71, indicating 13.9% growth from the prior-year reported number.

SYNNEX Corporation Price and EPS Surprise

SYNNEX Corporation Price and EPS Surprise

SYNNEX Corporation price-eps-surprise | SYNNEX Corporation Quote

Let’s see how things are shaping up for this announcement.

Factors to Consider

SYNNEX’s second-quarter fiscal 2019 results are likely to benefit from solid demand across its portfolio of products and services. The company is also performing well in all the end markets including the SMB.

Moreover, acquisitions and partnerships are helping it expand its product portfolio. The company’s buyout of Covergys last October is likely to be a key consistent driver in the soon-to-be reported quarter as well. Further, new business wins backed by its burgeoning footprint and the enhanced capabilities of its new consolidation are likely to be the key catalysts.

In the fiscal second quarter, Technology Solutions segment is envisioned to perform within seasonal norms. Growth in the underlying market and channel as the company focuses on incremental revenue opportunities is encouraging. Stability in Hyve business is a positive too.

However, the company anticipates a slight sequential drop in its revenues and adjusted profitability margins in the soon-to-be-reported quarter due to seasonality in Concentrix revenues as well as in profitability.

What Our Model Says

The proven Zacks model clearly indicates that a company with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) has good chances of beating estimates if it also has a positive Earnings ESP. Zacks Rank #4 (Sell) or 5 (Strong Sell) stocks are best avoided. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

SYYNEX has a Zacks Rank #3, which increases the predictive power of ESP. However, its Earnings ESP of 0.00% in the combination makes surprise prediction difficult for the stock in its upcoming quarterly results.

Stocks With Favorable Combination

Here are a few stocks worth considering as our model shows that these have the right combination of elements to beat on earnings in the upcoming releases:

Applied Materials, Inc. AMAT has an Earnings ESP of +0.14% and is a #2 Ranked stock. You can see the complete list of today’s Zacks #1 Rank stocks here.

Alteryx, Inc. AYX has an Earnings ESP of +22.41% and a Zacks Rank #2.

Verizon Communications Inc. VZ has an Earnings ESP of +4.35% and a Zacks Rank of 3.

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Verizon Communications Inc. (VZ) : Free Stock Analysis Report
 
SYNNEX Corporation (SNX) : Free Stock Analysis Report
 
Applied Materials, Inc. (AMAT) : Free Stock Analysis Report
 
Alteryx, Inc. (AYX) : Free Stock Analysis Report
 
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