Synnex Falls Most Since 2008 on Outlook: San Francisco Mo
Synnex Corp. (SNX), a provider of technology and networking-equipment distribution services, tumbled the most in more than three years, after the company’s second-quarter revenue and profit forecasts trailed estimates.
The shares fell 13 percent to $38.18 at the close in New York for the biggest one-day decline since Dec. 2008, following the company’s forecast yesterday. Synnex, based in Fremont, California, has gained 25 percent this year.
Synnex, which counts Hewlett-Packard Co. (HPQ) and Staples Inc. (SPLS) as customers, benefited from increased demand for disk drives in the past two quarters as flooding in Thailand disrupted global supplies. Demand “leveled out after several months,” Thomas Alsborg, the company’s chief financial officer, said today in an e-mailed statement.
Synnex “had greater inventory than others had in the channel,” said Osten Bernardez, of Cross Research in Livingston, New Jersey. “They were able to price accordingly for people who were buying hard drives,” said Bernardez, who recommends holding the stock.
The company yesterday predicted revenue of $2.45 billion to $2.55 billion for its fiscal second quarter ending May 31. That compared to a median estimate of $2.6 billion from analysts in a Bloomberg survey. Earnings per share will be 87 cents to 91 cents, the company said. Analysts in a Bloomberg survey had predicted a median estimate of 95 cents.
Synnex’s rise this year indicates that the stock could have “limited potential” for further growth, Richard Gardner, an analyst with Citigroup Inc. in San Francisco, wrote in a research note today. Gardner lowered his rating on Synnex to neutral from buy.
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