Synnex 1Q Profit Beats The Street, But Sales Growth Slows

Synnex beat Wall Street's earnings forecast for its fiscal first quarter ended Feb. 28, but revenue growth slowed down again.

The Fremont, Calif.-based distributor reported a profit of $13.9 million, or 43 cents per share, compared to $10.7 million, or 34 cents per share, a year earlier. Analysts had projected earnings of 40 cents per share, according to Thomson Financial/First Call.

Synnex's first -quarter sales came in at $1.59 billion, up 5.8 percent from $1.5 billion in the year-ago quarter.

However, the company's year-over-year sales growth was the lowest for a quarter in at least a year and slowed down for the second consecutive quarter. In the fourth and third quarters last year, sales rose 9.1 percent and 14.4 percent, respectively.

Synnex's distribution revenue in the first quarter totaled $1.48 billion, up 6.2 percent from last year. Contract assembly revenue was flat at $111.4 million.

During the quarter, Synnex closed acquisitions of Link2Support and PC Wholesale for $54.4 million. Both deals closed near the end of the quarter and had a negligible impact on revenue and earnings, the company said.

"We continue to deliver improved results due to increased efficiencies in our business model and solid execution in our core distribution business," Synnex President and CEO Bob Huang said in a statement. "Recent investments intended to enhance our distribution segment and further develop our business process outsourcing revenue will enable our ongoing overall growth strategy."

For its fiscal second quarter, Synnex expects revenue of $1.6 billion to $1.65 billion and earnings of $14 million to $14.7 million, or 43 cents to 45 cents per share. Analysts predict earnings of 41 cents per share.

Synnex shares closed at $19.74 on Thursday, up 40 cents, or 2 percent, per share.

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