TD Synnex Slides Post Mixed Q1 Performance, Street-Missing Q2 Outlook

  • TD Synnex Corp (NYSE: SNX) reported a first-quarter FY23 revenue decline of 2.2% year-over-year to $15.125 billion, missing the consensus of $15.750 billion.
  • On a constant currency basis, revenue increased by 0.7% Y/Y, driven primarily by its Advanced Solutions portfolio and high-growth technologies, partially offset by a decline in its Endpoint Solutions portfolio.
  • Non-GAAP gross billings were $20.2 billion versus $20.1 billion in the prior fiscal first quarter.
  • Adjusted EPS of $2.93 beat the consensus of $2.85.
  • Adjusted operating margin expanded 14 basis points Y/Y to 2.93%, driven by a mix shift to high-growth technologies and synergy execution.
  • The trailing fiscal four-quarters ROIC was 7.5% compared to 9.7% in the prior year, and the adjusted ROIC was 10.6% versus 13.9% for the previous year.
  • TD Synnex's free cash flow was $(140.07) million versus $(1.346) billion a year ago.
  • The company held cash and equivalents of $539.29 million.
  • Dividend: TD Synnex declared a quarterly dividend of $0.35/share.
  • CEO Rich Hume said, "We are confident that our variable cost structure, diversified portfolio, and commitment to investing in high-growth technologies provide us with the flexibility to adjust to changes in the market environment."
  • Outlook: TD Synnex expects Q2 revenue of $14.0 billion - $15.0 billion, below the consensus of $15.74 billion. It sees Adjusted EPS of $2.25 - $2.75, below the Street view of $2.82.
  • Price Action: SNX shares traded lower by 2.50% at $90.69 on the last check Tuesday.
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