Synnex Distribution Revenues Flat, Earnings Per Share Dips

Total distribution revenue was reported at $2.42 billion, but revenue from the Global Business Services (GBS) unit was reported at $52.5 million, for an increase of 16.5 percent over the first quarter of last year.

Earnings per share were posted at 88 cents, compared to $1.02 in the year ago quarter. The stronger number for last year was partly driven by a shortage of hard drives, which increased profitability in that space, according to CEO Kevin Murai.

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"Our U.S. business was good," Murai told CRN in an interview after the close of the market. "We grew on a year-over-year basis in the mid-single-digit rates. Unfortunately, we faced a tough market in other parts of the business, and other parts of the world, particularly Canada. Overall, there were a lot of headwinds and tailwinds. But, I think we're holding own against the other distributors. We've maintained, and probably gained a little bit of share, across the U.S.."

Murai said his company saw positive growth in key sectors such as communications, networking, security and virtually anything that had to do with cloud and mobility. Recognizing a huge trend towards mobility, Murai says Synnex has singled out that sector for particular emphasis.

"We've recently formed a global mobility business unit," he said. "Although it has its own P&L for specific product and market segments, it is also coordinated among a number of managers who have mobility products. This business unit reports directly to me, along with the other major ones such as U.S. distribution, Canada distribution and Japan distribution. That's how strategic it is."

Murai added that Synnex has also launched initiatives aimed at helping customers to understand and adopt cloud computing. "We've been investing money in putting together the resources and training and education to our customers to help them understand what the new ecosystem is going to look like, and provide them with the tools that will help them to participate, and to be at the leading edge of cloud-based solutions."

The Synnex outlook for the second quarter, currently underway, anticipates mixed demand across various products and geographies, combined with an ongoing trend towards competitive pricing. Revenues for the current quarter are expected to range between $2.425 billion and $2.525 billion. Net income is expected to range between $29.8 million and $31 million. Diluted earnings per share are expected to be in the range of $0.78 to $0.82.

PUBLISHED, MARCH 27