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TD SYNNEX (SNX) Surges 4% as Q4 Earnings Beat Estimates

TD SYNNEX SNX stock was up approximately 4% in pre-market trade today after the company delivered better-than-expected fourth-quarter fiscal 2021 results. The company’s fiscal fourth-quarter non-GAAP earnings of $2.86 per share topped the Zacks Consensus Estimate by 7.5% and improved 1.4% year over year.

Revenues jumped 155.1% year over year to $15.61 billion, mainly attributable to the inclusion of revenues from the recently completed merger of Tech Data Corporation. The top line also surpassed the Zacks Consensus Estimate of $15.52 billion.

TD SYNNEX was formerly known as SYNNEX Corporation. The company changed its name after the acquisition of Tech Data Corporation on Sep 1, 2021.

The company continues to witness strong demand for its technology products and services. In addition, a steady IT spending environment, backed by rapid digital transformations, was an upside. However, prevailing industry-wide supply-chain constraints negatively impacted the top line.

TD SYNNEX Corp. Price and EPS Surprise

TD SYNNEX Corp. price-eps-surprise | TD SYNNEX Corp. Quote

Quarterly Details

Gross profit grew 157.2% year over year to $943.2 million, while gross margin remained flat at 6%. Adjusted selling, general & administrative expenses jumped to $558.7 million from the year-ago quarter’s $146.1 million.

In the reported quarter, non-GAAP operating income was up 84.9% to $407.9 million. However, non-GAAP operating margin contracted 100 basis points on a year-over-year basis to 2.61%.

TD SYNNEX ended the fiscal fourth quarter with cash and cash equivalents of $994 million compared with $4.05 billion witnessed at the end of the fiscal third quarter.

During the fiscal fourth quarter, SNX generated $561 million of cash from operational activities. During full-fiscal 2021, it generated operating cash flow of $810 million.

Additionally, the company announced that its board of directors has declared a quarterly cash dividend of 30 cents per share, 50% higher than the previous dividend rate. The newly approved dividend is payable on Jan 28 to shareholders of record as of Jan 21.

Guidance

For the first quarter of fiscal 2022, revenues are expected between $14.75 billion and $15.75 billion.

Non-GAAP net income is estimated in the range of $245-$275 million. Moreover, TD SYNNEX projects non-GAAP earnings between $2.55 and $2.85 per share.

For fiscal 2022, the company projects non-GAAP earnings in the range of $10.80-$11.20 per share. Moreover, TD SYNNEX expects to return approximately 50% of its cash flow to shareholders in the form of dividend and share buybacks over the next two to three years.

Zacks Rank & Stocks to Consider

Currently, TD SYNNEX carries a Zacks Rank #4 (Sell).

Some better-ranked stocks from the broader technology sector include Broadcom AVGO, Apple AAPL and Jabil JBL. While Broadcom sports a Zacks Rank #1 (Strong Buy), Apple and Jabil each carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for Broadcom’s first-quarter fiscal 2022 earnings has been revised upward by 8.1% to $8.15 per share over the past 60 days. For fiscal 2022, earnings estimates have moved upward by 6.5% to $33.03 per share over the past 60 days.

Broadcom’s earnings beat the Zacks Consensus Estimate in the preceding four quarters, the average surprise being 1.4%. Shares of AVGO have rallied 38.2% in the trailing 12 months.

The Zacks Consensus Estimate for Apple’s first-quarter fiscal 2022 earnings has been revised upward by a penny to $1.89 per share over the past 30 days. For fiscal 2022, earnings estimates have moved upward by four cents to $5.82 per share in the past 30 days.

Apple’s earnings beat the Zacks Consensus Estimate thrice in the preceding four quarters while meeting the same on one occasion, the average surprise being 22.3%. AAPL stock has rallied 33.6% over the past year.

The Zacks Consensus Estimate for Jabil’s second-quarter fiscal 2022 earnings has been revised upward to $1.47 per share from $1.41 30 days ago. For fiscal 2022, earnings estimates have been revised upward by 25 cents to $6.58 per share in the past 30 days.

Jabil’s earnings beat the Zacks Consensus Estimate in the preceding four quarters, the average surprise being 18.1%. Shares of JBL have rallied 53.9% over the past year.


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