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Tech Data (TECD) Q1 Earnings Beat Estimates, Increase Y/Y
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Shares of Tech Data Corporation increased roughly 6% during the trading session on May 30, following the first-quarter fiscal 2020 results, which marked the third straight quarter of earnings beat. The company’s bottom line also registered double-digit growth year over year despite a decline in the top line. This increase can be attributed to lower costs of products sold and reduced operating expenses.
Moreover, management now envisions earnings of $2.15-$2.45 per share for second-quarter fiscal 2020. The midpoint of $2.30 is in line with the Zacks Consensus Estimate and indicates a sharp improvement from $2.01 reported in the year-ago period.
We also noticed that while Americas and Asia Pacific regions witnessed net sales growth, Europe encountered soft sales. This led to a year-over-year decline in the overall net sales that also fell short of the Zacks Consensus Estimate.
We note that shares of this Zacks Rank #2 (Buy) company have gained 14.2% year to date, compared with the industry’s growth of 17.1%.
Q1 Details
The company reported adjusted earnings of $2.04 per share in the reported quarter. The figure not only surpassed the Zacks Consensus Estimate of $1.98 but also increased 11% on a year-over-year basis.
However, net sales of $8,406.4 million decreased 2% year over year. Also, the figure lagged the consensus mark of $8,453 million. Net sales rose 3% on a constant-currency (cc) basis.
Net sales from the Americas (45.1% of global net sales) rose 5% to $3,789.2 million. Sales from Europe (51.3% of global net sales) declined 8% to $4,309.5 million. Sales from Asia-Pacific (3.6% of global net sales) increased 15% to $307.7 million.
Margins
The company’s gross profit fell 2.6% to $509.4 million in the reported quarter. Gross margin shrunk 6 bps to 6.1%. Adjusted selling, general & administrative (SG&A) expenses declined 3.6% to $384.6 million in the quarter under review. Adjusted selling, general & administrative expenses as percentage of revenues contracted 9 bps to 4.6%.
Adjusted operating income came in at $124.8 million, up 0.6% from $124.1 million in the year-ago quarter. Adjusted operating margin expanded 3 bps to 1.5%. Segment wise, operating margin contracted 14 bps to 2.2% for the Americas, while the metric expanded 12 bps to 1.1% for Europe and 51 bps to 0.9% for Asia Pacific.
Balance Sheet and Cash Flow
As of Apr 30, 2019, Tech Data had cash and cash equivalents of approximately $797.5 million, long-term debt of $1,297.9 million and total stockholders’ equity of $2,915.9 million.
During the quarter, the company bought back 346,000 shares worth $36 million. Tech Data generated cash from operations of $63.2 million.
Tech Data Corporation Price, Consensus and EPS Surprise
Tech Data issued second-quarter fiscal 2020 view, wherein the company anticipates sales to be $8.6-$8.9 billion. Although growth in IT market has slowed down, going ahead management sees robust demand for its products.
L Brands , with long-term earnings per share growth rate of 11%, carries a Zacks Rank #2.
Zumiez (ZUMZ - Free Report) , with long-term earnings per share growth rate of 13.5%, carries a Zacks Rank #2.
This Could Be the Fastest Way to Grow Wealth in 2019
Research indicates one sector is poised to deliver a crop of the best-performing stocks you'll find anywhere in the market. Breaking news in this space frequently creates quick double- and triple-digit profit opportunities.
These companies are changing the world – and owning their stocks could transform your portfolio in 2019 and beyond. Recent trades from this sector have generated +98%, +119% and +164% gains in as little as 1 month.
Image: Bigstock
Tech Data (TECD) Q1 Earnings Beat Estimates, Increase Y/Y
Shares of Tech Data Corporation increased roughly 6% during the trading session on May 30, following the first-quarter fiscal 2020 results, which marked the third straight quarter of earnings beat. The company’s bottom line also registered double-digit growth year over year despite a decline in the top line. This increase can be attributed to lower costs of products sold and reduced operating expenses.
Moreover, management now envisions earnings of $2.15-$2.45 per share for second-quarter fiscal 2020. The midpoint of $2.30 is in line with the Zacks Consensus Estimate and indicates a sharp improvement from $2.01 reported in the year-ago period.
We also noticed that while Americas and Asia Pacific regions witnessed net sales growth, Europe encountered soft sales. This led to a year-over-year decline in the overall net sales that also fell short of the Zacks Consensus Estimate.
We note that shares of this Zacks Rank #2 (Buy) company have gained 14.2% year to date, compared with the industry’s growth of 17.1%.
Q1 Details
The company reported adjusted earnings of $2.04 per share in the reported quarter. The figure not only surpassed the Zacks Consensus Estimate of $1.98 but also increased 11% on a year-over-year basis.
However, net sales of $8,406.4 million decreased 2% year over year. Also, the figure lagged the consensus mark of $8,453 million. Net sales rose 3% on a constant-currency (cc) basis.
Net sales from the Americas (45.1% of global net sales) rose 5% to $3,789.2 million. Sales from Europe (51.3% of global net sales) declined 8% to $4,309.5 million. Sales from Asia-Pacific (3.6% of global net sales) increased 15% to $307.7 million.
Margins
The company’s gross profit fell 2.6% to $509.4 million in the reported quarter. Gross margin shrunk 6 bps to 6.1%. Adjusted selling, general & administrative (SG&A) expenses declined 3.6% to $384.6 million in the quarter under review. Adjusted selling, general & administrative expenses as percentage of revenues contracted 9 bps to 4.6%.
Adjusted operating income came in at $124.8 million, up 0.6% from $124.1 million in the year-ago quarter. Adjusted operating margin expanded 3 bps to 1.5%. Segment wise, operating margin contracted 14 bps to 2.2% for the Americas, while the metric expanded 12 bps to 1.1% for Europe and 51 bps to 0.9% for Asia Pacific.
Balance Sheet and Cash Flow
As of Apr 30, 2019, Tech Data had cash and cash equivalents of approximately $797.5 million, long-term debt of $1,297.9 million and total stockholders’ equity of $2,915.9 million.
During the quarter, the company bought back 346,000 shares worth $36 million. Tech Data generated cash from operations of $63.2 million.
Tech Data Corporation Price, Consensus and EPS Surprise
Tech Data Corporation price-consensus-eps-surprise-chart | Tech Data Corporation Quote
Outlook
Tech Data issued second-quarter fiscal 2020 view, wherein the company anticipates sales to be $8.6-$8.9 billion. Although growth in IT market has slowed down, going ahead management sees robust demand for its products.
Looking for More? Check These Solid Picks
Children’s Place (PLCE - Free Report) , with long-term earnings per share growth rate of 8%, carries a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
L Brands , with long-term earnings per share growth rate of 11%, carries a Zacks Rank #2.
Zumiez (ZUMZ - Free Report) , with long-term earnings per share growth rate of 13.5%, carries a Zacks Rank #2.
This Could Be the Fastest Way to Grow Wealth in 2019
Research indicates one sector is poised to deliver a crop of the best-performing stocks you'll find anywhere in the market. Breaking news in this space frequently creates quick double- and triple-digit profit opportunities.
These companies are changing the world – and owning their stocks could transform your portfolio in 2019 and beyond. Recent trades from this sector have generated +98%, +119% and +164% gains in as little as 1 month.
Click here to see these breakthrough stocks now >>