Synnex Sees Improving IT Demand In Q3 Earnings

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IT demand is looking up across the board, according to Synnex.

The IT distributor saw net income jump 33.6 percent year-over-year to $46.6 million. In addition, Synnex recorded record revenue for the quarter with $2.73 billion in sales, up 6 percent from the third quarter one year ago.

"All of our geographies performed well," said Synnex President and CEO Kevin Murai during the earnings call, adding that the distributor's business in the U.S. grew in the high single digits.

[Related: Synnex, Comcast Join Forces For Telco Services Push]

Murai said Synnex saw improved demand across a variety of product categories and virtually all market segments. "From a market perspective, we saw strength in both consumer and commercial markets," Murai said.

In an interview with CRN after the earnings call, Murai said PC demand was still healthy and that new emerging technology trends were also helping to boost IT spending.

"At the highest level, we see a number of things getting traction in both the enterprise and SMB markets," Murai said. "We're still seeing a lot of commercial deployment of PCs, and security has also been very strong. In addition, cloud and enterprise mobility are also getting more traction. They're not the biggest parts of the business yet, but they're growing and they're contributing to the overall improvement."

Synnex said the only market experiencing softness in the quarter was the federal government space. Murai said sequestration has continued to have a negative impact on IT spending. "The core demand for IT in the federal government is as strong as it's ever been," Murai said. "But sequestration has been a factor, and I think government agencies have to work smarter as they try to improve their IT."

Synnex's Global Business Services (BGS) division saw revenue increase 10.7 percent year-over-year to $55.1 million. Earlier this month Synnex agreed to buy IBM's customer care services business for $505 million, which led to a $2.3 million pre-tax charge related to costs from the IBM deal.

Synnex said it expects IT demand to continue to improve in the fourth fiscal quarter. The company forecast earnings per share to be between $1.14 and $1.18 and revenue between $2.93 billion and $3.03 billion for the quarter.


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