Synnex (SNX) Tops Q2 EPS by 16c, Q3 Guidance Mixed

Synnex Corp. (NYSE: SNX) reported Q2 EPS of $1.52, $0.16 better than the analyst estimate of $1.36. Revenue for the quarter came in at $3.45 billion versus the consensus estimate of $3.17 billion.

Highlights:

• Technology Solutions: Revenue was $3.16 billion, up 24.2% from the prior fiscal year quarter. Adjusting for the translation effect of foreign currencies, primarily the yen and the Canadian dollar, the Technology Solutions business grew approximately 26.1%. Technology Solutions income before non-operating items, income taxes and non-controlling interest was $70.1 million, or 2.22% of segment revenue, compared with $48.7 million, or 1.91% of segment revenue, in the fiscal second quarter of 2013.
• Concentrix: Revenue was $293.5 million, up from $46.7 million over the prior fiscal year quarter due largely to the recently acquired IBM CRM business. Concentrix’ loss before non-operating items, income taxes and non-controlling interest was $2.2 million, or (0.74%) of Concentrix revenue, compared with income of $3.3 million, or 6.99% of Concentrix revenue, in the prior fiscal year quarter. Non-GAAP Concentrix income before non-operating items, income taxes and non-controlling interest was $27.8 million, or 9.48% of Concentrix revenue, for fiscal second quarter of 2014, compared to $4.3 million, or 9.12% of Concentrix revenue, in the prior year period.
• The trailing fiscal four quarter ROIC was 8.5% compared to 9.6% in the prior year fiscal second quarter. Excluding the impact of acquisition and integration expenses, the current fiscal quarter’s trailing ROIC was 10.4%.
• The cash conversion cycle was 46 days compared to 42 days in the prior year fiscal second quarter, due to growth in both business segments.
• The debt to capitalization ratio was 38%, up from 18% in the prior year fiscal second quarter, primarily due to financing the acquisition of the IBM CRM business.
• Depreciation and amortization were $9.2 and $15.2 million respectively.

Synnex sees Q3 2014 EPS of $1.45 to $1.50, versus the consensus of $1.53 and revenue of $3.3 to $3.4 billion, versus the consensus of $3.29 billion.

For earnings history and earnings-related data on Synnex Corp. (SNX) click here.

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