TD SYNNEX (SNX) Q4 Earnings Top Estimates, Revenues Miss
TD SYNNEX SNX reported mixed results for the fourth quarter of fiscal 2023, wherein the bottom line surpassed the Zacks Consensus Estimate, while the top line missed the same.
The company reported fourth-quarter non-GAAP earnings per share (EPS) of $3.13, which topped the Zacks Consensus Estimate of $2.69. The bottom-line performance was primarily driven by lower-than-expected interest expenses and income tax rates, along with a reduction in outstanding diluted shares. However, the company’s non-GAAP EPS declined 9% year over year, mainly due to lower-than-expected revenues.
Revenues decreased 11.3% year over year to $14.41 billion and missed the consensus mark of $14.54 billion. The decline in revenues was due to reduced demand for PC ecosystem products across various industries.
TD SYNNEX Corporation Price, Consensus and EPS Surprise
TD SYNNEX Corporation price-consensus-eps-surprise-chart | TD SYNNEX Corporation Quote
This, coupled with the ongoing post-pandemic situation, led to decreased sales in the company’s Endpoint Solutions portfolio. Furthermore, SNX also experienced a decline in revenues due to a shift in business mix and the migration of one of its Hyve customers to the consignment model.
On a constant-currency basis, fourth-quarter revenues decreased 13.3%.
Quarterly Details
The non-GAAP gross profit declined 5.5% year over year to $1.02 million, while the gross margin improved 44 basis points (bps) to 7.07%. Adjusted SG&A expenses increased to $592 million from the year-ago quarter’s $581.9 million.
In the reported quarter, the non-GAAP operating income was down 13.9% to $426.6 million. Moreover, the non-GAAP operating margin decreased 9 bps on a year-over-year basis to 2.96%.
TD SYNNEX ended the fiscal fourth quarter with cash and cash equivalents of $1.03 billion compared with $1.25 billion witnessed at the end of the fiscal third quarter. During the reported quarter, SNX generated $211 million in cash from operational activities in the fourth quarter and $1.41 billion during fiscal 2023.
The company returned $374 million to shareholders in the fourth quarter by repurchasing stocks worth $343 million and paying out $31 million in dividends. During fiscal 2023, it returned $751 million by repurchasing shares worth $621 million and $130 million via dividend payouts.
Guidance
SNX issued guidance for the first quarter of fiscal 2024. For the first quarter, it expects to generate revenues between $14 billion and $14.7 billion (midpoint $14.35 billion). The Zacks Consensus Estimate is pegged at $14.39 billion for first-quarter 2024.
The non-GAAP net income is estimated in the range of $232-$277 million. Moreover, TD SYNNEX projects non-GAAP EPS between $2.60 and $3.10 for the first quarter (midpoint $2.85). The consensus mark for first-quarter 2024 non-GAAP EPS is pegged at $2.78.
Zacks Rank and Stocks to Consider
Currently, TD SYNNEX carries a Zacks Rank #3 (Hold). Shares of SNX have declined 4.7% in the past year.
Some better-ranked stocks from the broader technology sector are Kanzhun BZ, BlackLine BL and Everbridge EVBG, each sporting a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Kanzhun's fourth-quarter 2023 earnings per share has been revised downward by 2 cents to 16 cents in the past 30 days. Shares of BZ have plunged 37.6% in the past year.
The Zacks Consensus Estimate for BlackLine’s fourth-quarter 2023 earnings has been revised by a penny northward to 55 cents per share in the past seven days. Shares of BL have declined 19.7% in the past year.
The Zacks Consensus Estimate for Everbridge’s fourth-quarter 2023 earnings has declined by a penny in the past 60 days to 49 cents per share. Shares of EVBG have lost 23.3% in the past year.
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