Synnex Q2 Profit Tops View - Update

(RTTNews) - Business services provider Synnex Corp. (SNX), Thursday reported a drop in profit for the second quarter, reflecting weak operating margins that offset revenue growth. Nevertheless, earnings and revenues for the quarter trumped Wall Street expectations, sending its shares up 5 percent in extended trading on the New York Stock Exchange.

Fremont, California-based Synnex said its second-quarter profit dropped to $44.4 million or $1.11 per share from $51.9 million or $1.30 per share last year.

Excluding special items, adjusted earnings for the quarter dropped to $1.37 per share from $1.55 per share a year ago. Analysts polled by Thomson Reuters expected earnings of $1.31 per share for the second quarter. Analysts' estimates typically exclude special items.

Synnex revenues for the second quarter grew 3.9 percent to $3.38 billion from $3.25 billion a year ago. Analysts had a consensus revenue estimate of $3.28 billion for the quarter.

Technology Solutions revenues rose 4.5 percent to $3.0 billion, while Concentrix revenues decreased 1.7 percent to $335.9 million.

Operating margin for the quarter dropped to 2.23 percent from 2.75 percent last year.

Looking forward to the third quarter, the company expects adjusted earnings of $1.52 to $1.57 per share and revenues of $3.40billion to $3.53 billion. Analyst currently expect earnings of $1.53 per share on revenues of $3.40 billion for the quarter.

Synnex closed Thursday's trading at $94.00, up $1.06 or 1.14%. The stock further gained $4.99 or 5.31% in the after-hours.