) surged a robust 23.3% on Apr 4, 2014, following the company's
first-quarter earnings release on Apr 3, 2014, after the market
closed. For the first quarter of 2014, Synnex Corporation
reported strong financial results with quarterly earnings of
$1.25 a share which comfortably surpassed the Zacks Consensus
Estimate of 94 cents a share by a strong 33%.
First-quarter earnings were also up a significant 37.4%
compared with the prior-year quarter. Profits during the quarter
were primarily driven by strong growth across the company's
business segments, especially its IT business which performed
For the first quarter of 2014, Synnex Corporation reported
revenues of $3.03 billion, surging 23% year over year compared
with $2.46 billion. Top line was primarily driven by strong
performance of the company's Technology Solutions segment and the
accretive acquisition of IBM CRM.
In first-quarter 2014, Synnex renamed its business segments
better reflect the company's business model.
(earlier Distribution segment): For the first quarter, revenues
for the Technology Solutions segment surged 20% year over year to
$2.90 billion from $2.48 billion in the prior-year quarter. After
adjusting the negative impact of currency translation of about
$93 million, the Technology Solutions business grew 23.8%.
The segment reported strong business in the U.S. and Japan,
while Canada also managed to contribute to the top-line
improvement due to organic growth and the acquisition of
Supercom. The segement's commercial and consumer markets also
witnessed increased sales.
(earlier GBS segment): Revenues for the first quarter for
Concentrix were $127 million, up a massive 186.2% year over from
$44.3 million in the prior-year quarter. Revenues in the segment
were primarily driven by the acquisition of the IBM customer care
business which was immediately accretive to the segment's
revenues after the deal closed on Jan 31, 2014 and the 18% growth
in the segment's legacy business.
For the first quarter, gross margin was up 484 basis points
(bps) to 6.83% compared with 6.34% in the comparable prior-year
quarter. The increase was mainly attributable to the positive
impact of the
) CRM acquisition. However, the operating margin for the quarter
was down 226 bps to 20.5% versus 22.7% primarily due to higher
selling and general expenses.
Cash and Balance Sheet
Exiting the quarter, the company had cash and cash equivalents
of $148.4 million compared with $151.6 million as on Nov 30,
2013. The company had a long-term debt of $77 million as on Feb
28, 2014 versus $56.4 million as on Nov 30, 2013. The company had
shareholders' equity of $1.53 billion as on Feb 28, 2014 compared
with shareholders' equity of $1.41 billion as on Nov 30,
Following the first-quarter results, the company provided
guidance for the second quarter of 2014. Revenues for the second
quarter are expected in the range of $3.1 billion to $3.2 billion
while non-GAAP earnings are expected to be in the range of $1.34
to $1.38 a share. The Zacks Consensus Estimate for the second
quarter is $1.37 a share. The guidance does not include
acquisition and integration expenses and amortization of
Synnex Corporation is upbeat about its performance for the
year ahead, with revenue growth across its business and accretive
strategic acquisitions. The acquisition of IBM CRM has placed
Synnex at the top 10
position as the provider of effective value-added
services. Further, in order to better reflect the
company's business model, Synnex has renamed its
Synnex Corp. is a leading provider of business process
services, servicing resellers and original equipment
manufacturers across the world. The company's primary business
process services include wholesale distribution, contract
assembly, and business process outsourcing.
Synnex currently has a Zacks Rank #3 (Hold). Investors
interested in the business software services sector can consider
better-ranked companies such as
Guidewire Software, Inc.
) having a Zacks Rank #1 (Strong Buy),
) both having a Zacks Rank #2 (Buy).
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