TD Synnex tumbles after reporting lower gross margin
SNX•TD Synnex shares fell 11.4% after its third-quarter gross margin declined to 6.61% from 7.22% a year earlier. Adjusted EPS of $5.68 and revenue of $21.56 billion topped analyst estimates of $4.63 and $18.9 billion.
1. Margin declines
TD Synnex’s third-quarter gross margin fell to 6.61% from 7.22% a year earlier, and its shares declined 11.4%. The CFO said on an earnings call that margin was pressured by a higher mix of lower-margin infrastructure and AI-related sales, including large AI rack programs in the company’s Hyve infrastructure business.
2. Results beat estimates
The company reported adjusted earnings per share of $5.68 and revenue of $21.56 billion, compared with analyst estimates of $4.63 and $18.9 billion. Eleven of 13 brokerages rated the stock “buy” or higher, while two rated it “hold”; the median price target was $330. The stock was up 69.9% including the session’s decline.
