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Why Shares of SYNNEX Corp. Soared Today

By Timothy Green - Sep 25, 2019 at 12:55PM

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A very strong third-quarter report lit a fire under the stock.

What happened

Shares of SYNNEX Corp. ( SNX 3.04% ) surged on Wednesday after the business process services provider reported its fiscal third-quarter results. SYNNEX beat analyst estimates for both revenue and earnings by wide margins, and its guidance compared favorably to expectations. The stock was up about 19.7% at 12:15 p.m. EDT.

So what

SYNNEX reported third-quarter revenue of $6.2 billion, up 28.6% year over year and $510 million higher than the average analyst estimate. Technology solutions revenue was up 16.5% to $5.0 billion, while Concentrix revenue jumped 136% to $1.2 billion.

A rising chart

Image source: Getty Images.

Non-GAAP (adjusted) earnings per share (EPS) came in at $3.30, up from $2.51 in the prior-year period and $0.44 better than analysts were expecting. Adjusted operating margin rose by more than a percentage point to 4.36%.

"Our record performance reflects the continued success of our go-to-market strategies in each business segment," said SYNNEX President and CEO Dennis Polk in prepared remarks included in the earnings release.

Now what

For the fiscal fourth quarter, SYNNEX expects to produce revenue between $5.85 billion and $6.15 billion. That's down from the third quarter, but it's in line with the average analyst estimate of $5.93 billion. Fourth-quarter non-GAAP EPS is expected between $3.50 and $3.70, mostly higher than the average analyst estimate of $3.52.

With SYNNEX's strong third-quarter report in the books, its shares carved out a new 52-week high on Wednesday.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis – even one of our own – helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.

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Stocks Mentioned

SYNNEX Corporation Stock Quote
SYNNEX Corporation
SNX
$106.41 (3.04%) $3.14

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