ScanSource Earnings: Here’s Why Investors are Ambivalent Now

ScanSource, Inc. (NASDAQ:SCSC) delivered a profit and beat Wall Street’s expectations, BUT came up short on beating the revenue expectation. The revenue miss is a negative sign to shareholders seeking high growth out of the company.

ScanSource, Inc. Earnings Cheat Sheet

Results: Adjusted Earnings Per Share increased 0% to $0.71 in the quarter versus EPS of $0.71 in the year-earlier quarter.

Revenue: Decreased 5.54% to $712.7 million from the year-earlier quarter.

Actual vs. Wall St. Expectations: ScanSource, Inc. reported adjusted EPS income of $0.71 per share. By that measure, the company beat the mean analyst estimate of $0.61. It missed the average revenue estimate of $724.15 million.

Quoting Management: “We saw record quarterly sales in our North America Communications and Security business units,” said Mike Baur, CEO, ScanSource, Inc. “The lack of big deals in our POS & Barcode business units, however, led to lower than expected fourth quarter sales. Despite lower sales, our return on invested capital increased to 17.2%, excluding the impairment charges, driven by higher margins, better working capital management, and our focus on value-added growth.”

Key Stats (on next page)…

Revenue increased 4.35% from $682.97 million in the previous quarter. EPS increased 33.96% from $0.53 in the previous quarter.

Looking Forward: Analysts have a neutral outlook for the company’s next-quarter performance. Over the past three months, the average estimate for next quarter’s earnings is a profit of $0.69 and has not changed. For the current year, the average estimate has moved up from a profit of $2.42 to a profit of $2.43 over the last ninety days.

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(Company fundamentals provided by Xignite Financials. Email any earnings discrepancies to earnings [at] wallstcheatsheet.com)

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