Please ensure Javascript is enabled for purposes of website accessibility

Why Tech Data Stock Popped Today

By Steve Symington - Nov 29, 2018 at 1:15PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The IT solutions leader just delivered a stellar quarter and an encouraging forward outlook. Here's what investors need to know.

What happened

Shares of Tech Data (TECD) are up 21.1% as of 1:45 p.m. EST Thursday after the IT products and services distributor announced strong fiscal third-quarter 2018 results. 

More specifically, Tech Data's quarterly revenue climbed 11% year over year to $9.34 billion, while adjusted net income soared more than 50% to $116.3 million, or $3.02 per share. Most investors would have settled for earnings of just $2.17 per share on revenue of $8.92 billion.

Man in suit drawing arrow chart indicating steep gains.

IMAGE SOURCE: GETTY IMAGES.

So what

Tech Data CEO Rich Hume called it a "strong Q3 performance with great execution across" its three Americas, Europe, and Asia-Pacific regions. Tech Data also paid down $100 million of debt and repurchased $44 million in shares during the quarter.

"Our Q3 results reflect the powerful combination of our end-to-end portfolio and strong execution by our global teams," Hume added. "They also validate the strategic role we play in the IT supply chain -- delivering high value through our end-to-end portfolio to channel partners across the broad spectrum of IT products and solutions."

Now what

What's more, for the current fiscal fourth quarter, Tech Data anticipates revenue ranging from $10.5 billion to $10.9 billion and adjusted earnings per share of $3.90 to $4.20. Even the lower ends of both ranges are well above consensus estimates, which predicted fiscal Q4 earnings of $3.77 per share on revenue closer to $10.3 billion.

In the end, this was a straightforward beat-and-raise scenario for Tech Data, and the stock is understandably responding in kind.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Tech Data Corporation Stock Quote
Tech Data Corporation
TECD

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
316%
 
S&P 500 Returns
112%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 07/03/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.