What’s driving SYNNEX Corporation (NYSE: SNX) stock higher

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SYNNEX Corporation (NYSE: SNX) stock soared over 10% on 26th June, 2019 (As of 1:28 pm GMT-4; Source: Google finance) as the company has posted better than expected results for the second quarter of FY 19. Second quarter consolidated non-GAAP operating income was $244 million, up $92 million or 60% year-over-year. Non-GAAP operating margin up 4.3% was a 116 basis point expansion from the prior year period. Second quarter net other income was $22 million compared to a $1 million net expense in the prior year period this was primarily due to $90 Million benefit recorded up on this element of contingent consideration related to the Westcon-Comstor Americas acquisition the effective tax rate for the second quarter was 25% compared to 12% a year ago the prior year quarter was impacted by a true up of $70 million related to the U.S. tax format.

What’s driving SYNNEX Corporation (NYSE: SNX) stock higher

Moreover, Technology Solutions revenue grew 3% to $4.6 billion compared to $4.4 billion in the prior year quarter, which includes about $159 million of gross to net revenue headwinds. On a year-over-year basis in constant currency, gross revenue increased by 7%.

Concentrix revenue grew 136% to $1.2 billion from $491 million in the prior year quarter primarily due to the Convergys acquisition, which was completed in October of 2018. On a pro forma basis and constant currency basis, revenue grew above 3%. The consolidated gross profit dollars totaled $698 million, up 63% or $259 million versus a year ago and gross margin was over 12%, an improvement of 346 basis points from the prior year quarter. Several factors contributed to the gross profit dollars and margin increase, most notably, the positive contribution from the Convergys acquisition and overall strong revenue growth in the company. Technology Solutions gross margin of 5.9% increased 32 basis points from the prior year quarter mainly due to mix and balanced growth across our portfolio. Concentrix gross margin was 37.1% down slightly from the prior year quarter driven by revenue mix.

SNX in the second quarter of FY 19 has reported the adjusted earnings per share of $2.86, beating the analysts’ estimates for the adjusted earnings per share of $2.71, according to analysts polled by FactSet. The company had reported the adjusted revenue growth of 17 percent to $5.72 billion in the second quarter of FY 19, beating the analysts’ estimates for revenue of $5.52 billion.

Synnex expects revenue to be in the range of $5.55 billion to $5.85 billion in its fiscal third quarter and adjusted net income is expected to be in the range of $2.80 to $2.92 a share.

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