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ScanSource, Inc. (SCSC - Free Report) reported adjusted earnings of 76 cents per share in fourth-quarter fiscal 2023 (ended Jun 30, 2023), missing the Zacks Consensus Estimate of 88 cents. The bottom line declined 16% from the prior-year quarter’s earnings of 91 cents per share.
On a reported basis, the company delivered earnings of 68 cents per share compared with the prior-year quarter’s 78 cents per share.
The company reported net sales of $947 million in the reported quarter, down 1.6% from the year-ago quarter’s levels. The top line surpassed the Zacks Consensus Estimate of $918 million.
Net sales in the United States and Canada were down 1.3% to $855 million. International sales decreased by 4.1% to $93 million.
Specialty Technology Solutions’ revenues fell 3.3% to $562 million in fourth-quarter fiscal 2023, courtesy of lost sales from the cyberattack and a slowdown in mobility and barcoding.
Sales at Modern Communications & Cloud were $386 million in the reported quarter, up 1% year over year, driven by growth in Cisco products.
ScanSource, Inc. Price, Consensus and EPS Surprise
The cost of sales amounted to $838 million in the fiscal fourth quarter, down 1.5% from the year-ago quarter’s levels. The gross profit totaled $109 million, down 1.9% from the year-ago quarter’s $111 million. The gross margin came in at 11.5% during the reported quarter, remaining flat year over year.
Selling, general and administrative expenses fell 2.1% year over year to $74 million. The adjusted operating profit was $32.8 million in comparison to the prior-year quarter’s $31.9 million. The adjusted operating margin was 3.5% compared with 3.3% reported in the prior year’s quarter. Adjusted EBITDA was up 3.9% year over year to $40 million.
Financial Condition
The company reported cash and cash equivalents of $36 million as of Jun 30, 2023, in comparison to $38 million as of Jun 30, 2022. The company utilized $15 million of cash in operating activities in the fiscal fourth quarter compared with $79 million used in the prior-year quarter. The company’s long-term debt was $144 million at the end of fiscal 2023, up from $124 million at the end of fiscal 2022.
Fiscal 2023 Performance
ScanSource reported adjusted earnings per share of $3.85 in fiscal 2023, in comparison to $3.97 reported in the prior fiscal. The bottom line missed the Zacks Consensus Estimate of $3.96 per share.
Including one-time items, the bottom line came in at $3.47, up 0.9% from $3.44 reported in fiscal 2022. Sales were up 7.3% year over year to $3.78 billion. The top line surpassed the Zacks Consensus Estimate of $3.76 billion.
Fiscal 2024 Outlook
ScanSource expects net sales growth of at least 3% in fiscal 2024. Adjusted EBITDA is projected to be at least $180 million. The company expects a free cash flow of at least $150 million.
Price Performance
ScanSource's shares have lost 18.3% in the past year against the industry’s growth of 5.2%.
Image Source: Zacks Investment Research
Zacks Rank and Stocks to Consider
ScanSource currently carries a Zacks Rank #4 (Sell).
Hawkins has an average trailing four-quarter earnings surprise of 25.5%. The Zacks Consensus Estimate for HWKN’s fiscal 2024 earnings is pegged at $3.40 per share. The consensus estimate for 2024 earnings has moved 38% north in the past 60 days. Its shares gained 30.6% in the last year.
The Zacks Consensus Estimate for PPG Industries’ fiscal 2023 earnings per share is pinned at $7.47, indicating growth of 23.5% from the prior-year actual. Earnings estimates have moved 3% north in the past 60 days. It has an average trailing four-quarter earnings surprise of 7.3%. PPG’s shares have gained 9.7% in the past year.
L.B. Foster has an average trailing four-quarter earnings surprise of 134.5%. The Zacks Consensus Estimate for FSTR’s 2023 earnings is pegged at 53 cents per share. Earnings estimates have been unchanged in the past 60 days. FSTR’s shares gained 30.1% in the last year.
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ScanSource (SCSC) Q4 Earnings Miss, Sales Beat Estimates
ScanSource, Inc. (SCSC - Free Report) reported adjusted earnings of 76 cents per share in fourth-quarter fiscal 2023 (ended Jun 30, 2023), missing the Zacks Consensus Estimate of 88 cents. The bottom line declined 16% from the prior-year quarter’s earnings of 91 cents per share.
On a reported basis, the company delivered earnings of 68 cents per share compared with the prior-year quarter’s 78 cents per share.
The company reported net sales of $947 million in the reported quarter, down 1.6% from the year-ago quarter’s levels. The top line surpassed the Zacks Consensus Estimate of $918 million.
Net sales in the United States and Canada were down 1.3% to $855 million. International sales decreased by 4.1% to $93 million.
Specialty Technology Solutions’ revenues fell 3.3% to $562 million in fourth-quarter fiscal 2023, courtesy of lost sales from the cyberattack and a slowdown in mobility and barcoding.
Sales at Modern Communications & Cloud were $386 million in the reported quarter, up 1% year over year, driven by growth in Cisco products.
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 $838 million in the fiscal fourth quarter, down 1.5% from the year-ago quarter’s levels. The gross profit totaled $109 million, down 1.9% from the year-ago quarter’s $111 million. The gross margin came in at 11.5% during the reported quarter, remaining flat year over year.
Selling, general and administrative expenses fell 2.1% year over year to $74 million. The adjusted operating profit was $32.8 million in comparison to the prior-year quarter’s $31.9 million. The adjusted operating margin was 3.5% compared with 3.3% reported in the prior year’s quarter. Adjusted EBITDA was up 3.9% year over year to $40 million.
Financial Condition
The company reported cash and cash equivalents of $36 million as of Jun 30, 2023, in comparison to $38 million as of Jun 30, 2022. The company utilized $15 million of cash in operating activities in the fiscal fourth quarter compared with $79 million used in the prior-year quarter. The company’s long-term debt was $144 million at the end of fiscal 2023, up from $124 million at the end of fiscal 2022.
Fiscal 2023 Performance
ScanSource reported adjusted earnings per share of $3.85 in fiscal 2023, in comparison to $3.97 reported in the prior fiscal. The bottom line missed the Zacks Consensus Estimate of $3.96 per share.
Including one-time items, the bottom line came in at $3.47, up 0.9% from $3.44 reported in fiscal 2022. Sales were up 7.3% year over year to $3.78 billion. The top line surpassed the Zacks Consensus Estimate of $3.76 billion.
Fiscal 2024 Outlook
ScanSource expects net sales growth of at least 3% in fiscal 2024. Adjusted EBITDA is projected to be at least $180 million. The company expects a free cash flow of at least $150 million.
Price Performance
ScanSource's shares have lost 18.3% in the past year against the industry’s growth of 5.2%.
Image Source: Zacks Investment Research
Zacks Rank and Stocks to Consider
ScanSource currently carries a Zacks Rank #4 (Sell).
Some better-ranked stocks from the basic materials space are Hawkins, Inc. (HWKN - Free Report) , PPG Industries, Inc. (PPG - Free Report) and L.B. Foster Company (FSTR - Free Report) . HWKN and PPG sport a Zacks Rank #1 (Strong Buy) at present and FSTR has a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Hawkins has an average trailing four-quarter earnings surprise of 25.5%. The Zacks Consensus Estimate for HWKN’s fiscal 2024 earnings is pegged at $3.40 per share. The consensus estimate for 2024 earnings has moved 38% north in the past 60 days. Its shares gained 30.6% in the last year.
The Zacks Consensus Estimate for PPG Industries’ fiscal 2023 earnings per share is pinned at $7.47, indicating growth of 23.5% from the prior-year actual. Earnings estimates have moved 3% north in the past 60 days. It has an average trailing four-quarter earnings surprise of 7.3%. PPG’s shares have gained 9.7% in the past year.
L.B. Foster has an average trailing four-quarter earnings surprise of 134.5%. The Zacks Consensus Estimate for FSTR’s 2023 earnings is pegged at 53 cents per share. Earnings estimates have been unchanged in the past 60 days. FSTR’s shares gained 30.1% in the last year.