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ScanSource (SCSC) Earnings & Sales Beat Estimates in Q1
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ScanSource, Inc. (SCSC - Free Report) reported adjusted earnings of $1.07 per share in first-quarter fiscal 2023 (ended Sep 30, 2022), beating the Zacks Consensus Estimate of $1.05. The bottom line rose 8% from the prior-year quarter’s earnings of 99 cents per share driven by strong demand.
On a reported basis, the company delivered earnings of 94 cents per share compared with the prior-year quarter’s 86 cents per share.
The company reported net sales of $943.8 million in the reported quarter, up 10% from the year-ago quarter. The upside was driven by solid growth in North America. The top line surpassed the Zacks Consensus Estimate of $911 million. Excluding foreign exchange impact, net sales were around $944.5 million in the quarter under review.
Net sales in the United States and Canada were up 12% to $859 million. International sales declined 4% to $84 million.
Specialty Technology Solutions’ revenues increased 15% to $576 million in first-quarter fiscal 2023, courtesy of broad-based demand across technologies.
Sales at Modern Communications & Cloud were $367 million in the reported quarter, up 3% year over year, supported by elevated demand across communications solutions.
ScanSource, Inc. Price, Consensus and EPS Surprise
The cost of sales amounted to $830 million in the fiscal first quarter, up 10% from the year-ago quarter. The gross profit totaled $113.5 million, up 11.7% from the year-ago quarter’s $101.6 million due to higher sales volume and higher vendor program recognition. The gross margin came in at 12% during the reported quarter compared with the prior-year quarter’s 11.8%.
Selling, general and administrative expenses rose 12% year over year to $71.6 million. The adjusted operating profit was $39.1 million compared with the prior-year quarter’s $34.9 million. The adjusted operating margin was 4.1%, up from 4.1% in the prior-year quarter. Adjusted EBITDA was up 9.4% year over year to $45 million.
Financial Condition
The company reported cash and cash equivalents of $40.5 million as of Sep 30, 2022 compared with $38 million as of Jun 30, 2022. The company utilized $48 million of cash in operating activities in the fiscal first quarter against an outflow of $57 million in the prior-year quarter. The company’s long-term debt was $149.6 million at the end of the first quarter of fiscal 2023, up from $124 million at the end of fiscal 2022.
Outlook
Backed by strong demand from channel partners across its technologies, ScanSource expects net sales growth of at least 5.5% in fiscal 2023. Adjusted EBITDA is projected to be at least $174 million.
Share Price Performance
Image Source: Zacks Investment Research
ScanSource's shares have declined 22.4% in the past year compared with the industry’s fall of 26.6%.
Zacks Rank and Stocks to Consider
ScanSource currently carries a Zacks Rank #3 (Hold).
Tenaris delivered a trailing four-quarter earnings surprise of 34%, on average. The Zacks Consensus Estimate for the company for 2022 indicates year-over-year growth of around 120%. The estimate has moved up 3% in the past 60 days. The TS stock has risen 32% in the past year.
Enerpac Tool delivered a four-quarter earnings surprise of 3.4%, on average. EPAC’s earnings estimates have increased 9% for fiscal 2023 (ending August 2023) in the past 60 days. The estimate indicates year-over-year growth of 44.6%. EPAC’s shares have gained 14% in the past year.
Reliance Steel & Aluminum’s earnings surprise in the last four quarters was 13.4%, on average. It has an expected earnings growth rate of 27.9% for fiscal 2022. The earnings estimates have moved up 0.1% over the past 60 days. The RS stock has gained 23% in the past year.
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ScanSource (SCSC) Earnings & Sales Beat Estimates in Q1
ScanSource, Inc. (SCSC - Free Report) reported adjusted earnings of $1.07 per share in first-quarter fiscal 2023 (ended Sep 30, 2022), beating the Zacks Consensus Estimate of $1.05. The bottom line rose 8% from the prior-year quarter’s earnings of 99 cents per share driven by strong demand.
On a reported basis, the company delivered earnings of 94 cents per share compared with the prior-year quarter’s 86 cents per share.
The company reported net sales of $943.8 million in the reported quarter, up 10% from the year-ago quarter. The upside was driven by solid growth in North America. The top line surpassed the Zacks Consensus Estimate of $911 million. Excluding foreign exchange impact, net sales were around $944.5 million in the quarter under review.
Net sales in the United States and Canada were up 12% to $859 million. International sales declined 4% to $84 million.
Specialty Technology Solutions’ revenues increased 15% to $576 million in first-quarter fiscal 2023, courtesy of broad-based demand across technologies.
Sales at Modern Communications & Cloud were $367 million in the reported quarter, up 3% year over year, supported by elevated demand across communications solutions.
ScanSource, Inc. Price, Consensus and EPS Surprise
ScanSource, Inc. price-consensus-eps-surprise-chart | ScanSource, Inc. Quote
Operational Update
The cost of sales amounted to $830 million in the fiscal first quarter, up 10% from the year-ago quarter. The gross profit totaled $113.5 million, up 11.7% from the year-ago quarter’s $101.6 million due to higher sales volume and higher vendor program recognition. The gross margin came in at 12% during the reported quarter compared with the prior-year quarter’s 11.8%.
Selling, general and administrative expenses rose 12% year over year to $71.6 million. The adjusted operating profit was $39.1 million compared with the prior-year quarter’s $34.9 million. The adjusted operating margin was 4.1%, up from 4.1% in the prior-year quarter. Adjusted EBITDA was up 9.4% year over year to $45 million.
Financial Condition
The company reported cash and cash equivalents of $40.5 million as of Sep 30, 2022 compared with $38 million as of Jun 30, 2022. The company utilized $48 million of cash in operating activities in the fiscal first quarter against an outflow of $57 million in the prior-year quarter. The company’s long-term debt was $149.6 million at the end of the first quarter of fiscal 2023, up from $124 million at the end of fiscal 2022.
Outlook
Backed by strong demand from channel partners across its technologies, ScanSource expects net sales growth of at least 5.5% in fiscal 2023. Adjusted EBITDA is projected to be at least $174 million.
Share Price Performance
Image Source: Zacks Investment Research
ScanSource's shares have declined 22.4% in the past year compared with the industry’s fall of 26.6%.
Zacks Rank and Stocks to Consider
ScanSource currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks from the Industrial Products sector are Tenaris (TS - Free Report) , Enerpac Tool Group Corp. (EPAC - Free Report) and Reliance Steel & Aluminum Co. (RS - Free Report) . While TS and EPAC sport a Zacks Rank #1 (Strong Buy), RS carries a Zacks Rank #2 (Buy) at present. You can see the complete list of today's Zacks #1 Rank stocks here.
Tenaris delivered a trailing four-quarter earnings surprise of 34%, on average. The Zacks Consensus Estimate for the company for 2022 indicates year-over-year growth of around 120%. The estimate has moved up 3% in the past 60 days. The TS stock has risen 32% in the past year.
Enerpac Tool delivered a four-quarter earnings surprise of 3.4%, on average. EPAC’s earnings estimates have increased 9% for fiscal 2023 (ending August 2023) in the past 60 days. The estimate indicates year-over-year growth of 44.6%. EPAC’s shares have gained 14% in the past year.
Reliance Steel & Aluminum’s earnings surprise in the last four quarters was 13.4%, on average. It has an expected earnings growth rate of 27.9% for fiscal 2022. The earnings estimates have moved up 0.1% over the past 60 days. The RS stock has gained 23% in the past year.