business services provider Synnex Corp. (SNX: Quote), Thursday reported a lower profit for the fourth quarter, as revenues declined and costs increased, reflecting customer business transition at a core segment. Both earnings and revenues for the quarter came in ahead of Street estimates.
Moving forward, Synnex detailed a weak outlook for the first quarter.
Synnex provides distribution and business process outsourcing services to resellers, retailers, and original equipment manufacturers. Its services include IT distribution, supply chain management, and contract assembly.
Operating margin for the three-month period declined to 2.70 percent from 2.98 percent last year.
Revenues for the quarter dropped 2.7 percent to $2.77 billion from $2.84 billion last year. Eight analysts polled by Thomson Reuters expected revenues of $2.76 billion.
Sales from distribution segment, which generates majority of the revenues, dropped to 3 percent to $2.72 billion for the quarter. The decline was due to customer business transition starting within fourth-quarter from a gross revenue business to a net fee for service logistics relationship.
Global Business Services segment revenue grew 22.2 percent to $54.9 million.
The Fremont, California-based company’s profit dropped to $43.6 million or $1.16 per share from $50.2 million or $1.37 per share last year. On average, nine analysts polled by Thomson Reuters expected earnings of $1.04 per share for the quarter. Analysts’ estimates typically exclude special items.
Looking forward to the first quarter, the company expects earnings of $0.85 to $0.89 per share on revenues of $2.38 billion and $2.48 billion. Analysts currently expect earnings of $0.89 per share on revenues of $2.51 billion.
SNX closed Thursday’s trade at $35.84, up 1.21%, on the NYSE. The stock, however, slipped 1.23% in after-hours trade.
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by RTT Staff Writer
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