FREMONT, Calif. & CLEARWATER, Fla. - TD SYNNEX (NYSE: NYSE:SNX), a leading global distributor and solutions aggregator for the IT ecosystem, reported financial results for its fiscal first quarter ended February 29, 2024. The company saw a 7.6% year-over-year decrease in revenue, posting $14.0 billion, within its guided range. Despite the revenue decline, the company experienced a gross margin increase and robust shareholder returns.
The fiscal first quarter's net income rose to $172 million, with a non-GAAP net income of $266 million. TD SYNNEX also reported a non-GAAP gross margin of 7.20%, a 52 basis points increase from the prior fiscal first quarter. Diluted earnings per share (EPS) reached $1.93, and non-GAAP diluted EPS climbed to $2.99, aligning with the higher end of the company's expectations.
TD SYNNEX generated $385 million in cash from operations and $344 million in free cash flow, a significant improvement from the previous fiscal first quarter's negative free cash flow of $140 million. The company returned $235 million to shareholders through share repurchases and dividends, marking a 59% increase from the prior fiscal first quarter.
The Board of Directors approved a new $2 billion share repurchase authorization, supplementing the existing program with approximately $197 million remaining. Moreover, a quarterly cash dividend of $0.40 per common share was announced, representing a 14% increase from the previous fiscal year.
CEO Rich Hume highlighted the company's expansive portfolio and improving IT demand environment as drivers for the strong results, including record margins and healthy free cash flow. He emphasized the company's focus on accelerating growth for partners and producing strong returns for shareholders.
Looking ahead to the fiscal 2024 second quarter, TD SYNNEX provided an outlook with revenue expectations ranging from $13.3 to $14.9 billion and non-GAAP diluted earnings per share between $2.50 and $3.00.
The information is based on a press release statement.
InvestingPro Insights
TD SYNNEX's recent financial performance reflects a company that, while facing revenue headwinds, has managed to deliver value to its shareholders. According to InvestingPro data, TD SYNNEX has a market capitalization of $9.41 billion and a Price/Earnings (P/E) ratio of 15.73, indicating a reasonable valuation in the market.
More specifically, the adjusted P/E ratio for the last twelve months as of Q4 2023 stands at 11.81, suggesting an even more attractive valuation when considering normalized earnings.
InvestingPro Tips highlight that TD SYNNEX has been actively returning capital to shareholders through aggressive share buybacks and a commendable track record of dividend growth, having raised its dividend for 3 consecutive years.
This aligns with the company's latest report of a new $2 billion share repurchase authorization and a 14% increase in its quarterly cash dividend. Moreover, the company's stock is known for low price volatility, which might appeal to investors looking for stable returns in a volatile market.
On the flip side, it's worth noting that 5 analysts have revised their earnings estimates downwards for the upcoming period. This could be an indicator of potential challenges ahead, though the company's strong free cash flow yield, as indicated by its valuation, could provide some cushion against these headwinds.
For investors looking to delve deeper into TD SYNNEX's financial health and future prospects, there are 15 additional InvestingPro Tips available, which could provide further insights into making informed investment decisions. To explore these insights and make use of the exclusive offer, use coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription at InvestingPro.
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