Synnex: Weak Consumer Demand Offset Stable Commercial Market In 3Q


Synnex met analysts' earnings expectations and reported third fiscal quarter revenue that was flat with the year-ago quarter. But, the Fremont, Calif.-based distributor also offered fourth-quarter projections that are below analysts' expectations, due in part to projections of soft consumer demand and less than seasonable demand for commercial customers, said Kevin Murai, CEO, in a statement.

"Our guidance reflects continued strong performance and market share gains in a somewhat more challenging demand environment," Murai said in the statement. "We are projecting that consumer demand will remain soft, and commercial demand will be relatively stable resulting in less than normal seasonal demand."

Synnex's distribution revenue in the third quarter ended Aug. 31 was $2.54 billion, the same as the year-ago quarter. Its Global Business Services sales increased 23 percent to $49.7 million.

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Overall, sales increased 0.2 percent, to $2.58 million. Net income was $35.1 million, or 93 cents per diluted share, compared to earnings of $39.0 million, or $1.07 per diluted share, in the year-ago quarter.

The year-ago earnings results were impacted positively by a hard drive shortage at the time, which did not rematerialize this year, according to the company.

Storage, peripherals and networking products had strong demand in the quarter, while notebooks and software were soft, said Murai on a conference call with analysts.

For the current quarter ending Nov. 30, Synnex expects sales between $2.71 billion and $2.81 billion and earnings per share between $1.02 and $1.06. Analysts were predicting Synnex to earn $1.16 per share on $2.86 billion in sales for the fourth quarter.

Shares of Synnex closed at $34.25 Tuesday, down 52 cents or 1.5 percent.

PUBLISHED SEPT. 25, 2012