Synnex Sees Revenue Gains; Operating Income Down


Synnex said Tuesday that despite an overall drop in operating income, second-quarter distribution revenue was better than expected and that the company saw growth in its main technology areas.

Synnex reported second-quarter distribution revenues of $2.54 billion, representing 4.2 percent growth over last year's second quarter. The company's overall revenue was posted at $2.59 billion, a 4.4 percent gain over the same period last year. Diluted earnings per share was measured at 81 cents, down from 90 cents in the year ago quarter.

Overall operating income was down 12.4 percent.

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"Overall it was a good quarter," CEO Kevin Murai told CRN. "In terms of operating income, that number does include the cost of integrating our Supercom business up in Canada, so basically you'd want to add $2.1 million on a pretax basis to get a fair reading of that."

"The distribution business was stronger than what we had originally anticipated, especially in the U.S. and Japan, which reported growth in the mid-to-high single digits," Murai said. "Canada is still little bit soft, but we expected that, because of the reductions in spending that were well published up there."

Other highlights for growth included the company's technical solutions business, which includes areas such as enterprise server and storage, integrated communications, security, voice communications, and print solutions.

Murai also pointed out that SMB is seeing improvement, as well.

"So we are feeling positive," he said. "When the overall market gets a little bit stronger, behavior gets a little bit better, and people get a little happier in terms of where things are heading."

The Synnex Global Business Services (GBS) revenues were posted at $55.1 million, an increase of 15.4 percent over the prior fiscal year quarter.

For the upcoming quarter, revenue is expected to be in the range of $2.65 billion to $2.75 billion with net income in the range of $34.3 million to $35.5 million. Diluted earnings per share is anticipated to run in the range of $0.91 to $0.95.

PUBLISHED JUNE 25, 2013