Why Synnex Shares Plunged
Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
What: Shares of Synnex have plunged today by as much as 10% after the company reported earnings and guidance disappointed investors.
So what: Revenue in the fiscal first quarter came in at $2.5 billion, mostly on target with consensus estimates. The same can be said for the $0.88 per share adjusted profit that the company reported. The real cause for the drop came with Synnex's outlook for the coming quarter.
Now what: The business services company expects second-quarter sales to be in the range of $2.43 billion to $2.53 billion, the midpoint of which is below the $2.51 billion that the Street was modeling for. The bottom line should be in the ballpark of $0.78 to $0.82 per share, which is nowhere near the $0.92 per share consensus. The company is facing pricing pressure amid a tough demand environment, particularly in Canada.
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The article Why Synnex Shares Plunged originally appeared on Fool.com.Fool contributor Evan Niu, CFA, has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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