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SYNNEX (SNX) to Report Q4 Earnings: What's in the Cards?

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Zacks Equity Research
·4 min read
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SYNNEX Corporation SNX is slated to release fourth-quarter fiscal 2020 results on Jan 11.

For the quarter, the company expects revenues between $6.45 billion and $6.65 billion. The Zacks Consensus Estimate for fiscal fourth-quarter revenues is pegged at $6.57 billion, indicating a 0.20% decline from the prior-year figure.

Moreover, the company projects non-GAAP earnings between $3.68 and $3.93 per share. The consensus mark for earnings of $3.83 cents suggests a year-over-year decline of 10.1% from the $4.26 reported in the year-ago quarter.

The company’s earnings surpassed the Zacks Consensus Estimate in each of the trailing four quarters, the average being 81.2%.

SYNNEX Corporation Price and Consensus

SYNNEX Corporation Price and Consensus
SYNNEX Corporation Price and Consensus

SYNNEX Corporation price-consensus-chart | SYNNEX Corporation Quote

Factors at Play

SYNNEX’s fiscal fourth-quarter performance is likely to have benefited from increased demand for hardware and tools, which support remote working. Notably, the COVID-19 pandemic-led work-and-learn-from-home wave is likely to have bolstered sales of peripherals, software, communication, networking, and consumer electronics products. This impressive demand trend is anticipated to have been conducive to SYNNEX’s top-line performance during the quarter under review.

Additionally, the work-and-learn-from-home necessity has been stoking demand for cloud storage. Furthermore, the lockdown has bolstered the usage of online and e-commerce services globally. Therefore, data-center operators are enhancing their capacities to accommodate the demand spike for cloud services, which is likely to have benefited SYNNEX’s data-center servers and storage solution businesses during the fiscal fourth quarter.

Nonetheless, positive impact of the aforementioned factors might have been partially offset by the supply-chain disruptions caused by the pandemic. Remarkably, Southeast Asia, China and Taiwan are key markets for the company, and the aforementioned factors are likely to have dampened SYNNEX’s sales in these markets during the period under discussion.

Furthermore, organizations are pushing back their big and expensive technology products due to the slowdown in global economic growth, which was a major downside in the fiscal fourth quarter. Foreign-exchange headwinds are expected to have been an added concern.

What Our Model Says

Our proven model does not conclusively predict an earnings beat for SYNNEX this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold), increases the chances of an earnings beat. But that’s not the case here. You can uncover the best stocks to buy or sell, before they’re reported, with our Earnings ESP Filter.

SYNNEX has an Earnings ESP of 0.00% and carries a Zacks Rank of 4 (Sell), at present.

Stocks With Favorable Combinations

Here are some companies, which, per our model, have the right combination of elements to post an earnings beat this quarter:

Avnet, Inc. AVT has an Earnings ESP of +2.63% and currently carries a Zacks Rank of 2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Maxim Integrated Products, Inc. MXIM has an Earnings ESP of +1.83% and holds a Zacks Rank of 2 currently.

Apple Inc. AAPL has an Earnings ESP of +10.58% and carries a Zacks Rank #3, at present.

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