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Tech Data (TECD) Beats Q1 Earnings on Strong Sales Growth
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Tech Data Corp. reported first-quarter fiscal 2018 non-GAAP earnings of $1.87 per share, comfortably beating the Zacks Consensus Estimate by 48 cents and jumped 78.1% from the year-ago quarter.
The massive growth was driven by robust top-line performance, which surged 28.5% to $7.66 billion, well ahead of the Zacks Consensus Estimate of $7.32 billion.
The year-over-year sales growth was primarily attributed to strong contribution ($1.6 billion for two months) from the recently acquired Avnet’s (AVT - Free Report) Technology Solutions business.
Excluding contribution from Technology Solutions, Tech Data's organic net sales increased almost 5% on a constant currency (CC) basis.
Tech Data Corporation Price, Consensus and EPS Surprise
Shares were up 3.2% in pre-market trading. We note that the stock has outperformed the Zacks Retail Computer Hardware industry on a year-to-date basis. While the stock has returned 14.5%, the industry gained 12.3%.
Quarter Details
Net sales from the Americas (45.3% of revenues) surged 45.3% to $3.47 billion. Technology Solutions contributed $1.0 billion to net sales. Organically net sales increased approximately 5% at CC.
Net sales from the Europe (52.3%) increased 12.1% to more than $4.00 billion on a year-over-year basis. Technology Solutions contributed $500 million to net sales. Organically net sales increased approximately 5% at CC.
Net sales from the APAC were $188.3 million in the quarter.
Non-GAAP gross margin expanded 100 basis points (bps) from the year-ago quarter to 6%, primarily due to the addition of Technology Solutions.
Non-GAAP selling, general & administrative (SG&A) expense as a percentage of revenues increased 40 bps to 4.4% in the reported quarter.
Non-GAAP operating margin expanded 60 bps to 1.6%. Segment wise, Americas and Europe expanded 50 bps and 10 bps, respectively.
Balance Sheet and Cash Flow
As of Apr 30, 2017, Tech Data had approximately $861.5 million in cash and cash equivalents compared with $2.13 billion as of Jan 31, 2017. In the quarter, cash provided by operations was $224 million, significantly lower than $445 million generated in the previous quarter.
Outlook
For second-quarter fiscal 2017, Tech Data forecasts net sales in the range of $8.55–$8.80 billion. Non-GAAP earnings are anticipated to be in the range of $1.95–$2.08 per share.
The Zacks Consensus Estimate is currently pegged at $2.15 per share on revenues of $8.37 billion.
Zacks Rank & Key Picks
Currently, Tech Data carries a Zacks Rank #3 (Hold). Applied Optoelectronics (AAOI - Free Report) and TiVo are two stocks worth watching in the broader sector. Both these stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Long-term earnings growth rate for Applied Optoelectronics and TiVo is currently pegged at 20% and 10%, respectively.
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Tech Data (TECD) Beats Q1 Earnings on Strong Sales Growth
Tech Data Corp. reported first-quarter fiscal 2018 non-GAAP earnings of $1.87 per share, comfortably beating the Zacks Consensus Estimate by 48 cents and jumped 78.1% from the year-ago quarter.
The massive growth was driven by robust top-line performance, which surged 28.5% to $7.66 billion, well ahead of the Zacks Consensus Estimate of $7.32 billion.
The year-over-year sales growth was primarily attributed to strong contribution ($1.6 billion for two months) from the recently acquired Avnet’s (AVT - Free Report) Technology Solutions business.
Excluding contribution from Technology Solutions, Tech Data's organic net sales increased almost 5% on a constant currency (CC) basis.
Tech Data Corporation Price, Consensus and EPS Surprise
Tech Data Corporation Price, Consensus and EPS Surprise | Tech Data Corporation Quote
Shares were up 3.2% in pre-market trading. We note that the stock has outperformed the Zacks Retail Computer Hardware industry on a year-to-date basis. While the stock has returned 14.5%, the industry gained 12.3%.
Quarter Details
Net sales from the Americas (45.3% of revenues) surged 45.3% to $3.47 billion. Technology Solutions contributed $1.0 billion to net sales. Organically net sales increased approximately 5% at CC.
Net sales from the Europe (52.3%) increased 12.1% to more than $4.00 billion on a year-over-year basis. Technology Solutions contributed $500 million to net sales. Organically net sales increased approximately 5% at CC.
Net sales from the APAC were $188.3 million in the quarter.
Non-GAAP gross margin expanded 100 basis points (bps) from the year-ago quarter to 6%, primarily due to the addition of Technology Solutions.
Non-GAAP selling, general & administrative (SG&A) expense as a percentage of revenues increased 40 bps to 4.4% in the reported quarter.
Non-GAAP operating margin expanded 60 bps to 1.6%. Segment wise, Americas and Europe expanded 50 bps and 10 bps, respectively.
Balance Sheet and Cash Flow
As of Apr 30, 2017, Tech Data had approximately $861.5 million in cash and cash equivalents compared with $2.13 billion as of Jan 31, 2017. In the quarter, cash provided by operations was $224 million, significantly lower than $445 million generated in the previous quarter.
Outlook
For second-quarter fiscal 2017, Tech Data forecasts net sales in the range of $8.55–$8.80 billion. Non-GAAP earnings are anticipated to be in the range of $1.95–$2.08 per share.
The Zacks Consensus Estimate is currently pegged at $2.15 per share on revenues of $8.37 billion.
Zacks Rank & Key Picks
Currently, Tech Data carries a Zacks Rank #3 (Hold). Applied Optoelectronics (AAOI - Free Report) and TiVo are two stocks worth watching in the broader sector. Both these stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Long-term earnings growth rate for Applied Optoelectronics and TiVo is currently pegged at 20% and 10%, respectively.
Will You Make a Fortune on the Shift to Electric Cars?
Here's another stock idea to consider. Much like petroleum 150 years ago, lithium power may soon shake the world, creating millionaires and reshaping geo-politics. Soon electric vehicles (EVs) may be cheaper than gas guzzlers. Some are already reaching 265 miles on a single charge.
With battery prices plummeting and charging stations set to multiply, one company stands out as the #1 stock to buy according to Zacks research.
It's not the one you think.
See This Ticker Free >>