Synnex Reports 98th Consecutive Profitable Quarter

Synnex earned $50.2 million, or $1.37 per diluted share, on sales of $2.84 billion in the quarter ended Nov. 30. Analysts had projected earnings of $1.14 per share on $2.82 billion in sales. In the year-ago quarter, Synnex earned $37.5 million, or $1.04 per share, on $2.47 billion in sales.

Synnex shares were trading at $33.98 Wednesday morning, up $1.89 or 6 percent after the earnings were announced.

"When we go back in time and take a look at the company's history, we see some interesting trends. First is sales growth that continues to beat the market. Also from an [earnings per share] perspective, we also continue to [outpace the market]," said Kevin Murai, CEO of Synnex. "One of the key positive messages in that is the number of programs and platforms we've taken to market. The income improvement is a key message that our programs are being accepted in the market. We're only able to increase income when we bring more value."

Synnex was a private company for many of those 98 quarters and full financial data is not publicly available.

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"Overall demand was relatively solid through the quarter. With our New Age and Jack of All Games [retail] business, seasonally we do sell more in the fourth quarter because of the nature of the products and the markets we sell into," Murai said. "The consumer market had been soft through the beginning of 2011. It's nice to see that more aggressive advertising even coming up to Black Friday, helped spur incremental demand. Even [revenue in the days] close to Christmas was a highlight in the market."

On the commercial side, Murai pointed to growth in the distributor's CloudSolv and RenewSolv services platforms for helping surpass income expectations. In addition, he said strong growth occurred in the enterprise server, storage and networking, telephony and wide format printer categories in the fourth quarter.

Murai said hard drives are still constrained following catastrophic floods in Thailand, and noted that enterprise-level bare hard drives were more constrained than PC hard drives. The constraints -- and resulting pricing fluctuations -- have lessened a bit compared to immediately following the events, he added.

Finally, as Synnex looks to reach 100 straight profitable quarters, the company hopes the upcoming releases of Windows 8 and more Ultrabooks will spur more demand. Murai was leaving Tuesday night to attend the Consumer Electronics Show in Las Vegas to see what other products might become best sellers this year.

"I always look forward to going to CES. A lot of the benefit is what you had not planned on seeing. I'll take the opportunity to walk the show floor and see new product launches, obviously categories like mobility are to be key but there's many others out there," he said. For the 2011 fiscal year, Synnex earned $150.6 million or $4.08 per diluted share on $10.41 billion in sales. In the prior fiscal year, Synnex earned $128 million, or $3.58 per diluted share, on $8.61 billion in sales.

For the current first fiscal quarter, Synnex expects earnings between 89 cents and 93 cents per share on revenue between $2.48 billion and $2.58 billion. Prior to the call, analysts were projecting earnings of 89 cents on earnings of $2.55 billion for the first fiscal quarter.