Synnex Shares Down 5% On Weak Outlook

(RTTNews) - Synnex Corp. (SNX), Wednesday reported a profit for the third quarter that dropped from a year ago, hurt largely higher operating costs that offset a 15 percent revenue growth. Shares of the company slipped 5 percent in after-hours due to a weak outlook for the fourth quarter.

The Fremont, California-based company's third-quarter profit dropped to $69.3 million or $1.74 per share from $75.2 million or $1.87 per share last year.

Adjusted earnings for the quarter rose to $2.57 per share from $2.16 per share last year. Analysts polled by Thomson Reuters estimated earnings of $2.46 per share for the quarter. Analysts' estimates typically exclude one-time items.

Revenues for the quarter rose 14.7 percent to $4.91 billion from $4.28 billion last year. Analysts had a consensus revenue estimate of $4.88 billion for the quarter.

Operating margin for the three-month period dropped 48 basis points to 2.38 percent from 2.86 percent last year.

"We saw continued momentum in both of our business segments that resulted in record third quarter performance," said CEO Dennis Polk. "Our focus on profitable growth and leveraging the strategic investments we've made in our business drove solid margin and earnings expansion."

The company also announced the about the expected close of the Convergys acquisition on October 5th.

Looking forward to the fourth quarter, Synnex expects fourth-quarter adjusted earnings of $2.90 to $3.10 per share and revenues of $5.2 billion to $5.4 billion. Analysts currently estimate earnings of $3.07 per share and revenues of $5.36 billion.

SNX closed Wednesday's trading at $84.90, up 1.11 or 1.32%, on the NYSE. The stock, however, slipped $4.60 or 5.42% in the after-hours trade.