Why SYNNEX Corporation (NYSE: SNX) stock is going gangbusters today

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SYNNEX Corporation (NYSE: SNX) stock surged 14.1% on 26th June, 2020 (as of 11:25 am GMT-4  ; Source: Google finance) after the company posted better than expected results for the second quarter of FY 20. SNX in the second quarter of FY 20 has reported the adjusted earnings per share of $1.83, beating the analysts’ estimates for the adjusted earnings per share of 51 cents, according to Zacks Investment Research. The company had reported 3.3 percent fall in the adjusted revenue to $5.53 billion in the second quarter of FY 20, beating the analysts’ estimates for revenue of $5.11 billion.

The company has reported second quarter fall in the net other income of $1 million compared to $22 million in the prior year period mainly due to $19 million benefit recorded in the prior year upon the settlement of contingent consideration related to the Westcon-Comstor Americas acquisition. And at the end of second quarter, including the cash and credit facilities, SYNNEX had about $2.5 billion in total liquidity available to fund operations. The company has generated Cash from operations of approximately $1.2 billion for the quarter. The company’s accounts receivable of total $3.2 billion and inventories totaled $3 billion on May 31 of 2020.

For the Technology Solutions, in the second quarter, the revenue was down 2% to $4.5 billion than the prior year quarter. TS gross margin of 6.1% expanded by 23 basis points from the prior year quarter, mainly due to favorable product mix. Non-GAAP operating income of the segment was $98 million, down 21% compared to the prior year quarter. Non-GAAP operating margin was 2.2%, which is 53 basis points lower than a year ago. For Concentrix, in the second quarter their revenue was $1.1 billion, which represents a decrease of 8% compared to the prior year quarter. FX adversely affected Concentrix revenue by approximately 2%. Non-GAAP operating income of Concentrix in the second quarter was $63 million, down 47% year-over-year. Non-GAAP operating margin was 5.9% compared to 10.3% a year ago.

Additionally, the company has approved a new three-year $400 million share repurchase program, which will be effective July 1 of 2020.

For the third quarter ending in September, Synnex expects its per-share earnings to be in the range of $2 to $2.50, revenue to be in the range of $5.5 billion to $5.9 billion and Non-GAAP net income is expected to be in the range of $103.9 million to $129.9 million. For the third quarter, the company expects interest expense to be approximately $32 million.

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