Concentrix Corp (NASDAQ:CNXC) Misses Estimates

Concentrix Corp (NASDAQ:CNXC) stock fell 4.04% (As on September 29, 11:43:09 AM UTC-4, Source: Google Finance) after the company posted lower than expected results for the third quarter of FY 22. Non-GAAP operating income was $221.5 million, or 14.0% of revenue, compared with $181.6 million, or 13.0% of revenue, in the prior year third quarter. Adjusted EBITDA was $258.4 million, or 16.4% of revenue, compared with $214.8 million, or 15.4% of revenue, in the prior year third quarter. Cash flow from operations was $152.6 million in the quarter. Free cash flow for the quarter was $126.4 million.

CNXC in the third quarter of FY 22 has reported the adjusted earnings per share of $2.95, missing the analysts’ estimates for the adjusted earnings per share of $2.97. The company had reported the adjusted revenue growth of 13.1 percent to $1.58 billion in the third quarter of FY 22, missing the analysts’ estimates for revenue of $1.59 billion.

Furthermore, the company has raised the quarterly dividend to $0.275 per share from $0.25 per share. The dividend will be payable on Nov. 8 to shareholders of record on Oct. 28. Concentrix repurchased 0.4 million shares in the third quarter at a cost of $50.3 million under its previously announced share repurchase program at an average cost of $136.07 per share. At August 31, 2022, the Company’s remaining share repurchase authorization was $366.8 million.

Fourth quarter adjusted constant currency revenue growth is expected to approximate 7%. Based on current exchange rates, we expect an approximate 5-point negative impact of foreign exchange rates compared with the prior year. Additionally, the company expects the contribution of approximately $175 million in fourth quarter revenue from businesses acquired since the beginning of the prior year fourth quarter. Operating income is expected to exceed $180 million and non-GAAP operating income is expected to exceed $254 million.

Full year adjusted constant currency revenue growth is expected to approximate 9%. Based on current exchange rates, we expect an approximate 4-point negative impact of foreign exchange rates compared with the prior year. Additionally, the company expects full year revenue to include a net contribution of approximately $486 million from businesses acquired and divested since the beginning of fiscal year 2021. Operating income is expected to exceed $642 million and non-GAAP operating income is expected to exceed $890 million. The effective tax rate is expected to approximate 25%.

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