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TD SYNNEX Beats on Q3 Earnings: Can Strong Sales View Lift the Stock?
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TD SYNNEX Corporation (SNX - Free Report) reported better-than-expected third-quarter fiscal 2024 results. The company reported non-GAAP earnings of $2.86 per share, surpassing the Zacks Consensus Estimate of $2.80.
Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.
The bottom line increased 2.9% from the year-ago quarter’s earnings of $2.78 per share. The improvement reflects the benefits of higher revenues, which more than offset the negative impact of a decline in gross profit.
SNX’s quarterly revenues increased 5.2% year over year to $14.68 billion and came ahead of the consensus mark of $14.12 billion. The improvement was driven by growth in the company’s Advanced Solutions and Endpoint Solutions portfolios. However, the top-line growth was negatively impacted by approximately 4% as a greater percentage of the company’s revenues was presented on a net basis.
TD SYNNEX Corporation Price, Consensus and EPS Surprise
Buoyed by a better-than-expected third-quarter performance, TD SYNNEX provided strong revenue guidance for the fourth quarter. The mid-point of top-line guidance is higher than the Zacks Consensus Estimate, indicating strong year-over-year growth.
Shares of TD SYNNEX have soared 17% over the past year. Its better-than-expected third-quarter performance, along with strong revenue guidance for the current quarter, is likely to boost the SNX stock price higher in the near term.
TD SYNNEX’s Third-Quarter Details
The non-GAAP gross profit declined 1.3% year over year to $961 million, while the gross margin contracted 43 basis points (bps) to 6.54%. Adjusted SG&A expenses decreased to $568.2 million from the year-ago quarter’s $576.9 million. As a percentage of revenues, SG&A expenses decreased 26 bps to 3.87%. The third-quarter non-GAAP operating income was down 1% to $392.9 million. The non-GAAP operating margin decreased 16 bps on a year-over-year basis to 2.68%.
TD SYNNEX ended the third quarter of fiscal 2024 with cash and cash equivalents of $853.9 million compared with $1.17 billion at the end of the fiscal second quarter. The company ended the quarter with a long-term debt of $3.74 billion.
During the reported quarter, SNX generated an operating cash flow of $386 million and a free cash flow of $339 million. In the first three quarters of fiscal 2024, the company generated operating cash flow and free cash flow of $656 million and $530 million, respectively.
TD SYNNEX returned $91 million to its shareholders in the third quarter by repurchasing stocks worth $57 million and paying out $34 million in dividends. In the first three quarters of fiscal 2024, it returned $614 million by repurchasing $510 million worth of common stocks and paying $104 million in dividends.
During the reported quarter, SNX’s board of directors also approved a 14% hike in the quarterly dividend to 40 cents per share. The quarterly cash dividend will be payable on Oct. 25 to shareholders of record date as of Oct. 11.
TD SYNNEX’s Fourth-Quarter Guidance
SNX issued guidance for the fourth quarter of fiscal 2024. It expects to generate revenues between $14.9 billion and $15.7 billion (midpoint $15.3 billion). The Zacks Consensus Estimate is pegged at $15.12 billion.
The non-GAAP net income is estimated in the range of $239-$282 million. Moreover, TD SYNNEX projects non-GAAP EPS between $2.80 and $3.30 for the fourth quarter (midpoint $3.05). The consensus mark for non-GAAP EPS is pegged at $3.20.
TD SYNNEX’s Zacks Rank & Stocks to Consider
TD SYNNEX currently carries a Zacks Rank #3 (Hold).
The consensus mark for Aspen’s fiscal 2025 earnings has been revised upward by 70 cents to $7.43 per share over the past 60 days, indicating a 12.8% year-over-year increase. The long-term expected earnings growth rate for the stock stands at 13.1%. The stock of AZPN has soared 15% over the past year.
The Zacks Consensus Estimate for Yelp’s 2024 earnings has been revised upward by 4 cents to $1.65 per share in the past 30 days, suggesting a year-over-year increase of 22.2%. It has a long-term earnings growth expectation of 25.8%. Shares of YELP have declined 18.5% in the trailing 12 months.
The Zacks Consensus Estimate for Fortinet’s 2024 earnings has been revised upward by 2 cents to $2.03 per share in the past 30 days, indicating an increase of 24.5% on a year-over-year basis. It has a long-term earnings growth expectation of 16.3%. Shares of FTNT have jumped 31.7% over the past year.
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TD SYNNEX Beats on Q3 Earnings: Can Strong Sales View Lift the Stock?
TD SYNNEX Corporation (SNX - Free Report) reported better-than-expected third-quarter fiscal 2024 results. The company reported non-GAAP earnings of $2.86 per share, surpassing the Zacks Consensus Estimate of $2.80.
Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.
The bottom line increased 2.9% from the year-ago quarter’s earnings of $2.78 per share. The improvement reflects the benefits of higher revenues, which more than offset the negative impact of a decline in gross profit.
SNX’s quarterly revenues increased 5.2% year over year to $14.68 billion and came ahead of the consensus mark of $14.12 billion. The improvement was driven by growth in the company’s Advanced Solutions and Endpoint Solutions portfolios. However, the top-line growth was negatively impacted by approximately 4% as a greater percentage of the company’s revenues was presented on a net basis.
TD SYNNEX Corporation Price, Consensus and EPS Surprise
TD SYNNEX Corporation price-consensus-eps-surprise-chart | TD SYNNEX Corporation Quote
Buoyed by a better-than-expected third-quarter performance, TD SYNNEX provided strong revenue guidance for the fourth quarter. The mid-point of top-line guidance is higher than the Zacks Consensus Estimate, indicating strong year-over-year growth.
Shares of TD SYNNEX have soared 17% over the past year. Its better-than-expected third-quarter performance, along with strong revenue guidance for the current quarter, is likely to boost the SNX stock price higher in the near term.
TD SYNNEX’s Third-Quarter Details
The non-GAAP gross profit declined 1.3% year over year to $961 million, while the gross margin contracted 43 basis points (bps) to 6.54%. Adjusted SG&A expenses decreased to $568.2 million from the year-ago quarter’s $576.9 million. As a percentage of revenues, SG&A expenses decreased 26 bps to 3.87%. The third-quarter non-GAAP operating income was down 1% to $392.9 million. The non-GAAP operating margin decreased 16 bps on a year-over-year basis to 2.68%.
TD SYNNEX ended the third quarter of fiscal 2024 with cash and cash equivalents of $853.9 million compared with $1.17 billion at the end of the fiscal second quarter. The company ended the quarter with a long-term debt of $3.74 billion.
During the reported quarter, SNX generated an operating cash flow of $386 million and a free cash flow of $339 million. In the first three quarters of fiscal 2024, the company generated operating cash flow and free cash flow of $656 million and $530 million, respectively.
TD SYNNEX returned $91 million to its shareholders in the third quarter by repurchasing stocks worth $57 million and paying out $34 million in dividends. In the first three quarters of fiscal 2024, it returned $614 million by repurchasing $510 million worth of common stocks and paying $104 million in dividends.
During the reported quarter, SNX’s board of directors also approved a 14% hike in the quarterly dividend to 40 cents per share. The quarterly cash dividend will be payable on Oct. 25 to shareholders of record date as of Oct. 11.
TD SYNNEX’s Fourth-Quarter Guidance
SNX issued guidance for the fourth quarter of fiscal 2024. It expects to generate revenues between $14.9 billion and $15.7 billion (midpoint $15.3 billion). The Zacks Consensus Estimate is pegged at $15.12 billion.
The non-GAAP net income is estimated in the range of $239-$282 million. Moreover, TD SYNNEX projects non-GAAP EPS between $2.80 and $3.30 for the fourth quarter (midpoint $3.05). The consensus mark for non-GAAP EPS is pegged at $3.20.
TD SYNNEX’s Zacks Rank & Stocks to Consider
TD SYNNEX currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the broader technology sector are Aspen Technology (AZPN - Free Report) , Yelp (YELP - Free Report) and Fortinet (FTNT - Free Report) , each sporting a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today's Zacks #1 Rank stocks here.
The consensus mark for Aspen’s fiscal 2025 earnings has been revised upward by 70 cents to $7.43 per share over the past 60 days, indicating a 12.8% year-over-year increase. The long-term expected earnings growth rate for the stock stands at 13.1%. The stock of AZPN has soared 15% over the past year.
The Zacks Consensus Estimate for Yelp’s 2024 earnings has been revised upward by 4 cents to $1.65 per share in the past 30 days, suggesting a year-over-year increase of 22.2%. It has a long-term earnings growth expectation of 25.8%. Shares of YELP have declined 18.5% in the trailing 12 months.
The Zacks Consensus Estimate for Fortinet’s 2024 earnings has been revised upward by 2 cents to $2.03 per share in the past 30 days, indicating an increase of 24.5% on a year-over-year basis. It has a long-term earnings growth expectation of 16.3%. Shares of FTNT have jumped 31.7% over the past year.