Synnex Corporation (SNX) has reported a 31.16 percent jump in profit for the quarter ended May 31, 2015. The company has earned $51.87 million, or $1.30 a share in the quarter, compared with $39.55 million, or $1 a share for the same period last year. On the other hand, adjusted net income for the quarter stood at $61.68 million, or $1.55 a share compared with $59.46 million or $1.50 a share, a year ago. Revenue during the quarter dropped 5.78 percent to $3,253.78 million from $3,453.54 million in the previous year period. Gross margin for the quarter expanded 114 basis points over the previous year period to 9.22 percent. Total expenses were 97.25 percent of quarterly revenues, down from 98.03 percent for the same period last year. This has led to an improvement of 77 basis points in operating margin to 2.75 percent.
Operating income for the quarter was $89.36 million, compared with $68.08 million in the previous year period.
However, the adjusted operating income for the quarter stood at $104.86 million compared to $98.99 million in the prior year period. At the same time, adjusted operating margin improved 36 basis points in the quarter to 3.22 percent from 2.87 percent in the last year period.
“I am pleased to report a record operating profit and margin for our second quarter," stated Kevin Murai, president and chief executive officer. “Technology Solutions earnings and operating margin improved and the investments made in Concentrix resulted in revenue and operating margin exceeding our expectations.”
For the third-quarter, Synnex Corp forecasts revenue to be in the range of $3,300 million to $3,400 million. Synnex Corp expects adjusted net income to be in the range of $56.10 million to $58.10 million for the third-quarter. On an adjusted basis, the company expects diluted earnings per share to be in the range of $1.40 to $1.45 for the third-quarter.
Working capital increases sharply
Synnex Corp has recorded an increase in the working capital over the last year. It stood at $1,648.89 million as at May 31, 2015, up 59.18 percent or $613.03 million from $1,035.86 million on May 31, 2014. Current ratio was at 1.99 as on May 31, 2015, up from 1.41 on May 31, 2014. Cash conversion cycle (CCC) has increased to 49 days for the quarter from 43 days for the last year period. Days sales outstanding went up to 46 days for the quarter compared with 45 days for the same period last year.
Days inventory outstanding has increased to 40 days for the quarter compared with 38 days for the previous year period. At the same time, days payable outstanding went down to 37 days for the quarter from 40 for the same period last year.
Debt comes down
Synnex Corp has recorded a decline in total debt over the last one year. It stood at $735.73 million as on May 31, 2015, down 24.64 percent or $240.62 million from $976.35 million on May 31, 2014. Total debt was 17.88 percent of total assets as on May 31, 2015, compared with 21.82 percent on May 31, 2014. Debt to equity ratio was at 0.43 as on May 31, 2015, down from 0.62 as on May 31, 2014.
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