ScanSource (NASDAQ: SCSC) saw its stock price plummet 12.48% in pre-market trading on Thursday, following the release of its first-quarter earnings report. Despite beating earnings per share (EPS) estimates, the company's sales figures fell significantly short of expectations, raising concerns among investors.
The technology products distributor reported quarterly sales of $739.65 million, missing the analyst consensus estimate of $787.367 million by 6.06%. More worryingly, this figure represents a 4.63% decrease compared to sales of $775.580 million in the same quarter of the previous year. The company attributed the sales decline to lower large deals in its Specialty Technology Solutions segment.
Despite the disappointing top-line performance, ScanSource's bottom line showed strength. The company reported adjusted earnings of $1.06 per share, surpassing the analyst consensus estimate of $0.93 by 13.98%. This represents a 26.19% increase from the $0.84 per share earned in the same period last year. Additionally, ScanSource's gross profit margin improved to 14.5% from 13.1% due to a favorable sales mix and supplier program recognition. However, these positive aspects were overshadowed by the significant sales miss, leading to the sharp stock decline. Despite the challenges, ScanSource has reaffirmed its guidance for the fiscal year 2026, suggesting management's confidence in the company's long-term prospects.
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