Nucor earnings beat by $0.08, revenue fell short of estimates
Investing.com - TD Synnex (NYSE:SNX) stock climbed Wednesday after UBS reiterated its buy rating and raised its price target to $154.00 from $138.00 following the company’s quarterly earnings report. The stock, which has gained nearly 10% in the past week and is trading at a P/E ratio of 15.8, appears undervalued according to InvestingPro analysis.
The technology distributor reported earnings per share of $2.99, approximately 10% above UBS’s estimate of $2.70, driven by double-digit billings growth across both business segments. Advanced Solutions billings increased by 12% (approximately 10% excluding Hyve), while Endpoint billings rose 13%. The company, with annual revenue exceeding $60 billion, maintains strong financial health according to InvestingPro metrics, though it operates with relatively thin gross profit margins of 6.7%.
UBS noted that while the quarter benefited from roughly $100 million to $200 million in PC "pull-in" orders, the profit contribution from this was modest at approximately $10 million pre-tax, or roughly $0.09 in earnings per share. Despite this pull-in effect, TD Synnex’s third-quarter revenue guidance at the midpoint embeds approximately 3% growth.
Hyve billings grew in the high teens during the quarter, with strong performance from the company’s original customer and a slight recovery from a second customer that had paused orders in the previous quarter, though still below expectations.
UBS expects TD Synnex’s fiscal year 2025 earnings per share to track toward the high end of the company’s $11.50 to $12.00 guidance range, above the firm’s previous forecast of $11.59, prompting the price target increase based on a weighted average of updated calendar year 2026 and 2027 earnings estimates. Five analysts have recently revised their earnings estimates upward, according to InvestingPro, which offers comprehensive analysis and 12 additional insights about TD Synnex’s financial health and market position.
In other recent news, TD Synnex Corp has reported its financial results for the second quarter of fiscal year 2025, surpassing analysts’ expectations with a non-GAAP diluted earnings per share of $2.99, compared to the forecasted $2.71. The company’s revenue reached $14.95 billion, exceeding the anticipated $14.3 billion. TD Synnex demonstrated a 12% year-over-year increase in gross billings to $21.6 billion, with notable growth in software and advanced solutions segments. The company also returned $186 million to stockholders through share repurchases and dividends. Analysts have noted a positive outlook for TD Synnex’s third quarter, with projected non-GAAP gross billings of $21-22 billion and net revenue guidance of $14.7-15.5 billion. The company remains cautiously optimistic about demand, while keeping a close watch on potential impacts from tariffs and geopolitical uncertainties. Additionally, TD Synnex was recognized with multiple honors in the channel, including being named HPE’s global distribution partner of the year.
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