TD SYNNEX's (NYSE:SNX) Conservative Accounting Might Explain Soft Earnings

The market for TD SYNNEX Corporation's (NYSE:SNX) shares didn't move much after it posted weak earnings recently. Our analysis suggests that while the profits are soft, the foundations of the business are strong.

Check out our latest analysis for TD SYNNEX

The Impact Of Unusual Items On Profit

For anyone who wants to understand TD SYNNEX's profit beyond the statutory numbers, it's important to note that during the last twelve months statutory profit was reduced by US$221m due to unusual items. While deductions due to unusual items are disappointing in the first instance, there is a silver lining. We looked at thousands of listed companies and found that unusual items are very often one-off in nature. And that's hardly a surprise given these line items are considered unusual. If TD SYNNEX doesn't see those unusual expenses repeat, then all else being equal we'd expect its profit to increase over the coming year.

That might leave you wondering what analysts are forecasting in terms of future profitability. Luckily, you can click here to see an interactive graph depicting future profitability, based on their estimates.

Our Take On TD SYNNEX's Profit Performance

Because unusual items detracted from TD SYNNEX's earnings over the last year, you could argue that we can expect an improved result in the current quarter. Because of this, we think TD SYNNEX's earnings potential is at least as good as it seems, and maybe even better! And it's also good to see that its earnings per share have improved a bit over the last three years. Of course, we've only just scratched the surface when it comes to analysing its earnings; one could also consider margins, forecast growth, and return on investment, among other factors. In light of this, if you'd like to do more analysis on the company, it's vital to be informed of the risks involved. For example - TD SYNNEX has 3 warning signs we think you should be aware of.

Today we've zoomed in on a single data point to better understand the nature of TD SYNNEX's profit. But there is always more to discover if you are capable of focussing your mind on minutiae. Some people consider a high return on equity to be a good sign of a quality business. So you may wish to see this free collection of companies boasting high return on equity, or this list of stocks that insiders are buying.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.