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Synnex Plunges on Weak Outlook (SNX, ARW, AVT, IM)

Computer products distributor Synnex Inc. (NYSE: SNX) is watching its share price plummet today following its first quarter earnings report released last night after the markets closed. The company reported EPS of $1.02 on revenue of $2.46 billion, but its…

By Paul Ausick
Published March 28, 2012, 2:14pm ET · 1 min read

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Computer products distributor Synnex Inc. (NYSE: SNX) is watching its share price plummet today following its first quarter earnings report released last night after the markets closed. The company reported EPS of $1.02 on revenue of $2.46 billion, but its second-quarter forecast is what is causing the damage.

Synnex is the smallest of several tech distribution companies including Arrow Electronics Inc. (NYSE: ARW), Avnet Inc. (NYSE: AVT), and Ingram Micro Inc. (NYSE: IM).

Synnex is forecasting EPS of $0.87-$0.91, lower than analysts consensus estimate of $0.95. Revenue is forecast at $2.45-$2.55 billion, again lower than the consensus estimate of $2.6 billion. Net income is expected to drop from $38.2 million in the first quarter to $33.3-$34.5 million.

The company attributed the lower forecast to a switch-over to a fee-for-service model this year. Synnex expects a hit of $80-$100 million in its gross revenue from the change.

Shares are down -14% at $37.52 in a 52-week range of $22.56-$44.25.

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Paul Ausick

Paul Ausick has been writing for 247Wallst.com for more than a decade. He has written extensively on investing in the energy, defense, and technology sectors. In a previous life, he wrote technical documentation and managed a marketing communications group in Silicon Valley.

He has a bachelor's degree in English from the University of Chicago and now lives in Montana, where he fishes for trout in the summer and stays inside during the winter.

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