Goldman Sachs: SYNNEX's Report and Expectations Conflict

In a research report published earlier today by Goldman Sachs, SYNNEX's

disappointing report and elevated expectations have made for a tough combination. According to Goldman Sachs, “Synnex beat EPS by 10% in the February quarter, but revenue was 3% light. More so, the company's revenue outlook was a touch light for the May quarter and EPS was guided 6% below the Street. Management attributed most of the revenue shortfall to a shift in a customer engagement from a gross revenue basis to a fee for service, which negatively impacted sales by $30mn but benefitted gross margin. In addition, consumer and retail demand were weak, particularly in printing. Regarding IT spending, the company expects low- to mid-single digit growth in NA this year, in line with our expectations.” Goldman Sachs maintains its Neutral rating and $37.50 PT on SYNNEX, which closed yesterday at $43.64.