Business services provider Synnex Corp. (SNX: Quote), said Monday its second quarter profit increased from last year as improved margins more than offset a slight decline in revenues. Quarterly earnings were in line with Street analysts' estimates, while revenues fell short.
Moving forward, Synnex detailed a weak outlook for the third quarter, weighed down by economic uncertainties and transition of a customer relationship.
Following the news, Synnex shares lost over 4.8 percent in after-hours trading on the New York Stock Exchange.
Fremont, California-based Synnex Corp. provides distribution and business process outsourcing services to resellers, retailers, and original equipment manufacturers. Its services include IT distribution, supply chain management, and contract assembly.
Synnex reported second quarter net income of $34.4 million or $0.90 per share, up from $31.4 million or $0.85 per share last year.
On average, 8 analysts polled by Thomson Reuters expected earnings of $0.90 per share for the quarter. Analysts' estimates typically exclude special items.
Revenues for the quarter edged down to $2.483 billion from $2.496 billion a year ago. Analysts expected revenues of $2.51 billion for the quarter.
Distribution segment, which accounts for most of the business, registered an 0.8 percent decline in revenues compared to last year. Results were partly impacted by a certain customer business which transitioned from a gross revenue business to a net fee for service logistics relationship.
Global Business Services segment revenue was up 23, year-over-year.
Synnex recorded improved gross margin compared to the same quarter last year. The company also benefited from an expansion in operating margin to 2.39 percent from 2.17 percent a year ago.
For the third quarter, Synnex expects net earnings of $34.4 million to $35.7 million, or $0.91 to $0.95 per share. Revenues are forecast in the range of $2.55 billion to $2.65 billion for the quarter.
Analysts currently estimate earnings of $1.00 per share on revenues of $2.68 billion for the quarter.
SNX closed Monday at $33.02, down $0.87 or 2.57%, on the NYSE. In after hours, the stock dropped $1.61 or 4.87%. In the past year, its shares have traded in a range of $22.56 - $44.25.
| || |
| To receive FREE breaking news email alerts for Synnex Corp and others in your portfolio|
by RTT Staff Writer
For comments and feedback: email@example.com