Synnex Profit Rises, Details Weak Outlook; Shares Fall 9%

(RTTNews) - Business services provider Synnex Corp. (SNX), Wednesday reported a jump in profit for the second quarter, reflecting strong operating profit growth across all business segments. Earnings for the quarter trumped Wall Street expectations, but revenues fell short of estimates.

Moving ahead, the company provided a weak outlook for the third quarter, sending its shares down by about 9 percent in extended trade on the New York Stock Exchange.

Fremont, California-based Synnex said its second-quarter profit rose to $51.9 million or $1.30 per share from $39.6 million or $1.00 per share last year.

Excluding special items, adjusted earnings for the quarter improved to $61.7 million or $1.55 per share from $59.5 million or $1.50 per share a year ago. Analysts polled by Thomson Reuters expected earnings of $1.53 per share for the second quarter. Analysts' estimates typically exclude special items.

Synnex revenues for the second quarter fell 5.8 percent to $3.25 billion from $3.45 billion a year ago. Analysts had a consensus revenue estimate of $3.42 billion for the quarter.

Operating margin for the quarter improved to 2.75 percent from 1.97 percent last year.

Commenting on the results, CEO Kevin Murai said, "I am pleased to report a record operating profit and margin for our second quarter. Technology Solutions earnings and operating margin improved and the investments made in Concentrix resulted in revenue and operating margin exceeding our expectations."

Technology Solutions revenues dropped 7.82 percent to $2.9 billion, while Concentrix revenues jumped 16.5 percent to $341.8 million.

Looking forward to the third quarter, the company expects adjusted earnings of $1.40 to $1.45 per share and revenues of $3.30 billion to $3.40 billion. Analyst currently expect earnings of $1.67 per share on revenues of $3.53 billion for the quarter.

SNX closed Thursday's trading at $82.34, down $0.93 or 1.12%. The stock further dropped $7.34 or 8.91% in after-hours trade.