Tuesday, business process services provider SYNNEX Corp. (SNX), reported a rise in profit for the second quarter, notwithstanding a decline in revenues. Both earnings and revenues came in well ahead of Street estimates for the quarter. The company also issued its earnings forecast for the third quarter of fiscal year 2009, above analysts' consensus estimate.
The Fremont, California-based company's net income for the second quarter increased to $19.23 million or $0.57 per share from $18.51 million or $0.56 per share in the prior-year quarter.
On average, four analysts polled by Thomson Reuters expected the company to earn $0.48 per share for the quarter. Analysts' estimates typically excludes one-time charges and gains.
Quarterly revenues dropped 3.5% to $1.81 billion from $1.88 billion in the same quarter of last year, yet topped analysts' consensus estimate of $1.68 billion.
Distribution revenues for the quarter were $1.78 billion, down 3.9% from the same quarter a year ago, while Global Business Services revenues increased 21.9% year-over-year to $34.38 million from last year.
Gross profit for the quarter increased to $106.40 million from $101.00 million in the same quarter a year-ago. Income from operations for the quarter was $31.7 million, flat with last year.
During the quarter, SYNNEX also replaced its off-balance sheet Canadian accounts receivable securitization line and separate revolver with a new combined on-balance sheet arrangement with a combined revolving facility of up to C$125 million. The terms and conditions of the new Canadian arrangement require the accounts receivable portion be recorded as an on-balance sheet transaction.
As at May 31, 2009, nearly $56 million was outstanding under the new Canadian arrangement, compared to $74 million on the prior Canadian arrangements as at November 30, 2008, of which $59 million was recorded off-balance sheet
For the six-month period, net income rose to $39.00 million or $1.16 per share from $35.34 million or $1.07 per share last year. Revenues for the period, however, declined to $3.54 billion from $3.63 billion last year.
Looking ahead to the third quarter of fiscal year 2009, SYNNEX expects earnings within a range of $0.58 - $0.61 per share, while revenues are forecast within a range of $1.80 billion - $1.90 billion. The company expects net income within a range of $19.9 million - $20.9 million.
Analysts currently expect the company to report earnings of $0.51 per share on revenues of $1.75 billion for the third quarter of fiscal year 2009.
SNX closed Tuesday's regular trading at $24.99, up $0.42 or 1.71%, on a volume of 0.43 million shares on the NYSE. In after hours, SNX traded at $25.23, up $0.03 or 0.12%.
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