LONDON, UK / ACCESSWIRE / September 22, 2017 / Pro-Trader Daily has just published a free post-earnings coverage on Tech Data Corp. (NASDAQ: TECD), which can be viewed by registering at http://protraderdaily.com/optin/?symbol=TECD, following the Company's announcement of its second quarter fiscal 2018 financial results on August 31, 2017. The information technology products distributor exceeded revenue forecast and provided guidance for the upcoming quarter. Our daily stock reports are accessible for free, and with those to look forward today you also will be signing up for a complimentary member's account at:
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Earnings Reviewed
For the second quarter ended July 31, 2017, Tech Data's net sales surged 40% to $8.88 billion compared to net sales of $6.35 billion for Q2 FY17. The Company stated that the growth in net sales was primarily due to the addition of the Technology Solutions business acquired from Avnet, Inc. on February 27, 2017. On a constant currency basis, Tech Data's net sales increased 41%. The Company's reported numbers beat analysts' estimates of $8.71 billion.
During Q2 FY18, Tech Data's gross profit was $515.59 million, up 63% compared to gross profit of $316.45 million for Q2 FY17. As a percentage of net sales, the Company's gross profit was 5.80% compared to 4.98% in the prior year's same quarter.
Tech Data's selling, general, and administrative expenses (SG&A) were $410.6 million, or 4.62% of net sales, for Q2 FY18 compared to $243.8 million, or 3.84% of net sales, in Q2 FY17. The Company's non-GAAP SG&A was $387.7 million, up 63% on a y-o-y basis. As a percentage of net sales, Tech Data's non-GAAP SG&A was 4.37% for Q2 FY18 versus 3.75% in the prior year's comparable quarter. The increase in both dollars and percentage of net sales, on a GAAP and non-GAAP basis, was primarily attributable to the addition of Technology Solutions.
For Q2 FY18, Tech Data's worldwide operating income was $103.5 million, or 1.17% of net sales, compared to $73.4 million, or 1.15% of net sales, in Q2 FY17. The Company's non-GAAP operating income was $127.8 million, up 64% on a y-o-y basis. As a percentage of net sales, Tech Data's non-GAAP operating income was 1.44%, reflecting an improvement of 21 basis points over the prior year's same quarter.
Tech Data's net income was $47.5 million in Q2 FY18 compared to $46.4 million in Q2 FY17. The Company's non-GAAP net income was $66.7 million in the reported quarter, up 33% on a y-o-y basis. For Q2 FY18, Tech Data's earnings per share on a diluted basis (EPS) were $1.24 compared to $1.31 in Q2 FY17. The Company's non-GAAP EPS jumped 23% to $1.74 on a y-o-y basis. Tech Data's earnings fell short of Wall Street's estimate of $2.06 per share.
Cash Matters
Tech Data generated operating cash flow of $146 million in Q2 FY18, bringing its year-to-date cash flow from operations to $371 million. The Company exited the quarter with a cash balance of $1 billion. Tech Data's capital expenditures were $11 million in Q2 FY18.
Tech Data's return on invested capital for the trailing twelve months was 10% compared to 14% in the prior year's same period. The adjusted return on invested capital for the trailing twelve months was 12% compared to 14% in the prior year's corresponding period. At the end of the reported quarter, Tech Data had $2.7 billion of equity and a 45% debt-to-capital ratio.
Tech Data noted that in Q2 FY18, three of its vendor partners represented 10% or more of the Company's sales. Apple represented 12%, HP Inc. was 11%, and Cisco was 11%.
Business Outlook
For the quarter ending October 31, 2017, Tech Data is forecasting worldwide net sales to be in the range of $9.0 billion to $9.35 billion. The Company is expecting EPS to be in the range of $0.80 to $1.00 and non-GAAP EPS to be in the range of $1.84 to $2.04 for the upcoming quarter.
Stock Performance
Tech Data's share price finished yesterday's trading session at $86.36, marginally sliding 0.45%. A total volume of 419.18 thousand shares have exchanged hands. The Company's stock price advanced 0.20% in the previous twelve months. Additionally, the stock gained 1.98% since the start of the year. Shares of the Company have a PE ratio of 16.29 and currently have a market cap of $3.26 billion.
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SOURCE: Pro-Trader Daily