Synnex Q4 Results Top Estimates, But Shares Down 3% On Weak Outlook

(RTTNews) - Business services provider Synnex Corp. (SNX) reported Thursday a profit for the fourth quarter that declined five percent from last year, despite double-digit revenue growth, reflecting lower operating margins amid higher expenses.

However, both earnings per share and quarterly revenues topped analysts' expectations. The company also provided earnings guidance for the first quarter of fiscal 2014, below Street view.

"I am pleased to report a strong finish to fiscal 2013 with fourth quarter results reflecting the continued strength of our business," President and CEO Kevin Murai said in a statement.

Synnex provides distribution and business process outsourcing services to resellers, retailers, and original equipment manufacturers.

The Fremont, California-based company reported net income of $41.49 million or $1.10 per share for the fourth quarter, lower than $43.64 million or $1.16 per share in the prior-year quarter.

Excluding items, adjusted net income for the latest quarter was $45.41 million or $1.20 per share. On average, eight analysts polled by Thomson Reuters expected the company to report earnings of $1.18 per share for the quarter. Analysts' estimate typically excludes one-time items.

Revenues for the quarter grew 10.6 percent to $3.06 billion from $2.77 billion in the same quarter last year, and topped seven Wall Street analysts' consensus estimate of $2.98 billion.

Distribution business revenue for the quarter grew 10.6 percent or 14 percent in constant currency, to $3.01 billion from last year. Global business services revenue also increased 11.1 percent to $61.0 million from a year ago.

Operating margin for the quarter contracted 43 basis points to 2.27 percent from last year's 2.70 percent.

For fiscal 2013, the company reported net income of $152.23 million or $3.06 per share, compared to $151.38 million or $3.99 per share in the prior year. Excluding items, adjusted net income for the latest period was $158.22 million or $4.19 per share. Annual revenues grew 5.4 percent to $10.85 billion from last year.

Analysts expected the company to report full-year 2013 earnings of $4.11 per share on annual revenues of $10.75 billion.

Looking ahead to the first quarter for fiscal 2014, the company expects earnings in a range of $0.91 to $0.95 per share, on projected revenues between $2.675 billion and $2.775 billion. Street is currently looking for quarterly earnings of $1.03 per share on revenues of $2.70 billion.

"We're excited about the growth opportunities in 2014 in our Distribution and GBS businesses, as well as closing the acquisition of the IBM CRM BPO business which we expect to occur this quarter," Murai added.

SNX closed Thursday's regular trading session at $65.07, up $1.23 or 1.93% on a volume of 0.37 million shares. However, the stock pared the gains and lost $2.07 or 3.18% in after-hours trading.