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Tuesday, February 2, 2010

Avnet Beats Q2 Expectations

The recovering economy helped Avnet perform well in the second fiscal quarter in both operating groups and all three geographic regions that it reports on, according to the distributor.

Avnet reported $103.9 million in net income, or 68 cents per share, on $4.83 billion in sales for the fiscal quarter ended January 2, 2010. Sales increased 13.2 percent compared with the year-ago quarter while earnings increased about 3 percent, excluding a $1.32 billion impairment charge in the year-ago quarter that dramatically impacted earnings last year when the economy collapsed.

Analysts had expected earnings of 59 cents per share on $4.55 billion in sales for the second fiscal quarter.

"Avnet's strong growth this quarter provides further evidence that the global economy has begun the next growth cycle as sales at both operating groups came in well above normal seasonality and our upwardly revised expectations for the quarter," said Roy Vallee, Chairman and CEO of Avnet, in a statement.

Avnet's Technology Solutions, which includes its enterprise computer products and services distribution, reported sales of $2.32 billion for the quarter, a 15.8 percent increase from the year-ago quarter. Sales in the Americas increased 11.7 percent, while Europe, Middle East and Africa revenue increased 4.3 percent and Asia sales went up 136.5 percent

"Technology Solutions also delivered a 77 percent increase in year-over-year return on working capital. Our TS business is well positioned to translate this resumption of revenue growth into higher margins and returns," said Vallee in the statement.

Avnet Electronics Marketing reported sales of $2.52 billion, up 11 percent year-over-year.

For the current quarter, Avnet expects sales of between $4.1 billion and $4.7 billion with earnings of 53 cents to 61 cents per share. Analysts have expected 52 cents per share in net income on $4.31 billion for the third fiscal quarter.

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