Synnex Shares Spike 9% As Q3 Results Top Estimates, Guides Q4 In Line

(RTTNews) - Shares of Synnex Corp (SNX) surged nearly nine percent in extended trading on Monday after the business process services provider reported results for the third quarter that topped analysts' expectations. The company also provided earnings and revenue guidance for the fourth quarter, in line with Street view.

The company also reported a profit for the quarter that grew from last year, reflecting higher charges and lower operating margins.

"We are pleased to report record quarterly results in terms of both revenues and non-GAAP net income. Stronger than anticipated revenue growth in Technology Solutions and excellent performance in all aspects of Concentrix led to results ahead of our expectations,"President and CEO Kevin Murai said in a statement.

Fremont, California-based Synnex posted net earnings of $44.99 million or $1.15 per share for the third quarter, compared to $46.61 million or $0.19 per share in the prior-year quarter.

Results for the latest quarter include IBM CRM acquisition and integration expenses as well as the amortization of intangible assets totaling $0.44 per share, while the year-ago included only $0.09 per share of the same.

The year-ago quarter also included a one-time numerator adjustment resulting in $1.05 dilution for convertible senior notes settlement.

Excluding items, adjusted earnings for the quarter was $62.5 million or $1.59 per share, compared to $50.0 million or $1.33 per share in the year-ago quarter.

On average, seven analysts polled by Thomson Reuters expected the company to report earnings of $1.48 per share for the quarter. Analysts' estimates typically exclude special items.

Revenue for the quarter increased 29.3 percent to $3.54 billion from $2.73 billion in the same quarter last year, and topped six Wall Street analysts' consensus estimate of $3.40 billion.

At its key technology solutions segment, revenues increased 19.12 percent to $3.20 billion from last year. The smaller Concentrix segment saw strong revenue growth to $333.80 million from $46.3 million, due largely to almost full contribution from the recently acquired CRM business of IBM.

Operating margin for the quarter contracted 9 basis points to 2.23 percent from last year's 2.32 percent.

Looking ahead to the fourth quarter, the company expects adjusted earnings in a range of $1.66 to $1.71 per share, on projected revenues between $3.65 billion and $3.75 billion. Street is currently looking for fourth-quarter earnings of $1.68 per share on quarterly revenues of $3.67 billion.

"Our fourth quarter guidance reflects seasonally strong, healthy year-on-year growth in Technology Solutions and continued strong performance in Concentrix," Murai added.

SNX closed Monday's regular trading session at $62.19, up $0.74 or 1.20% on a volume of 0.78 million shares. The stock gained a further $5.31 or 8.54% in after-hours trading.