SYNNEX Corporation SNX is slated to release third-quarter fiscal 2019 results on Sep 24.
Notably, the company’s earnings surpassed the Zacks Consensus Estimate in each of the trailing four quarters, the average being 6.51%.
In the last reported quarter, the company delivered non-GAAP earnings of $2.86 per share, which improved 20.2% from the year-ago quarter and also beat the Zacks Consensus Estimate of $2.71.
Moreover, revenues of $5.72 billion surpassed the Zacks Consensus Estimate of $5.53 billion and increased 17% year over year as well. Adjusted for foreign exchange, revenues rose 18% sequentially.
What to Expect in Q3
For the fiscal third quarter, SYNNEX expects revenues in the range of $5.55-$5.85 billion. The Zacks Consensus Estimate is pegged at $5.68 billion, suggesting a 15.7% improvement from the figure reported in the year-ago quarter.
Non-GAAP earnings per share are projected in the band of $2.8-$2.92. The Zacks Consensus Estimate stands at $2.86, indicating 11.1% growth from the prior-year reported number.
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 third-quarter fiscal 2019 results are likely to benefit from the successful integration of Convergys business, which is will further boost its Concentrix revenues.
Moreover, new business wins backed by the growing footprint and enhanced capabilities of all its new consolidations are likely to be the key catalysts.
The company expects its overall business to perform in line with the historical seasonal trends during the fiscal third quarter and achieve a double-digit non-GAAP operating profit margin.
In the fiscal third 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.
However, growing macroeconomic challenges are a major concern for the company this earnings season. Further, increase in employee compensation may keep margins under pressure. Additionally, adverse foreign exchange fluctuations persist as a headwind.
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 high 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 -0.18% in the combination leaves surprise prediction inconclusive 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:
Keysight Technologies Inc. KEYS has an Earnings ESP of +2.08% and a Zacks Rank of 1. You can see the complete list of today’s Zacks #1 Rank stocks here.
Cadence Design Systems, Inc. CDNS has an Earnings ESP of +0.79% and a Zacks Rank #2.
Applied Materials, Inc. AMAT has an Earnings ESP of +0.13% and a Zacks Rank of 3.
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SYNNEX Corporation (SNX) : Free Stock Analysis Report
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