Back to top

Image: Bigstock

SYNNEX (SNX) to Report Q2 Earnings: What's in the Offing?

Read MoreHide Full Article

SYNNEX Corporation (SNX - Free Report) is slated to release second-quarter fiscal 2020 results on Jun 25.

During the fiscal first-quarter earnings call, the company didn’t provide any financial guidance for the second quarter citing an uncertain environment due to the coronavirus pandemic.

The Zacks Consensus Estimate for fiscal second-quarter revenues is pegged at $5.11 billion, indicating a 10.7% decline from the prior-year figure. The consensus mark for earnings of 50 cents suggests a year-over-year slump of 82.5% from the $2.86 reported in the year-ago quarter.

The company’s earnings surpassed the Zacks Consensus Estimate in each of the trailing four quarters, the average being 10.7%.
 

In the last reported quarter, the company delivered non-GAAP earnings of $3.26 per share, up 14.8% from the year-ago figure, beating the Zacks Consensus Estimate of $3.14.

However, revenues of $5.26 billion missed the Zacks Consensus Estimate of $5.35 billion, but marginally came in higher than the $5.25 billion reported in the year-ago quarter.

Factors at Play

Supply-chain disruptions caused by the coronavirus pandemic are expected to have adversely impacted SYNNEX’s fiscal second-quarter performance. Notably, Southeast Asia, China and Taiwan are key markets for the company, and the aforementioned factors might have significantly dampened SYNNEX’s sales in these markets.

Furthermore, organizations are pushing back their big and expensive technology products due to the slowdown in global economic growth, which has been a major downside for the fiscal second quarter. Foreign-exchange headwinds are expected to have been an added concern.

Nonetheless, negative impact of the aforementioned factors might have partially been offset by increased demand for hardware and tools which support remote working. Notably, the coronavirus-induced work-and-learn-from-home wave is likely to have bolstered sales of peripherals, software, communication, networking, and consumer electronics products. This solid demand trend is anticipated to have been conducive to SYNNEX’s fiscal second-quarter top-line performance.

Additionally, the work-and-learn-from-home necessity is stoking demand for cloud storage. Furthermore, the lockdown has bolstered the usage of online and e-commerce services globally. Therefore, data-center operators are enhancing their capacities to accommodate the demand spike for cloud services, which is likely to have benefited SYNNEX’s data-center servers and storage solution businesses.

What Our Model Says

Our proven model predicts an earnings beat for SYNNEX this season. The combination of a positive Earnings ESP, and Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold), increases the chances of an earnings beat. You can uncover the best stocks to buy or sell, before they’re reported, with our Earnings ESP Filter.

SYNNEX currently sports a Zacks Rank of 1 and has an Earnings ESP of +6.00%.

Some Other Stocks With Favorable Combinations

Here are some other companies, which, per our model, have the right combination of elements to post an earnings beat this quarter:

Enerpac Tool Group Corp. (EPAC - Free Report) has an Earnings ESP of +36.17% and currently carries a Zacks Rank of 2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Franklin Covey Company (FC - Free Report) has an Earnings ESP of +5.80% and holds a Zacks Rank of 3 currently.

McCormick Company, Incorporated (MKC - Free Report) has an Earnings ESP of +4.57% and carries a Zacks Rank #3, at present.

Zacks Top 10 Stocks for 2020

In addition to the stocks discussed above, would you like to know about our 10 finest buy-and-hold tickers for the entirety of 2020?

Last year's 2019 Zacks Top 10 Stocks portfolio returned gains as high as +102.7%. Now a brand-new portfolio has been handpicked from over 4,000 companies covered by the Zacks Rank. Don’t miss your chance to get in on these long-term buys.

Access Zacks Top 10 Stocks for 2020 today >>

Published in