Distributor posts $6.7 billion in sales for fiscal second quarter, points to bright spots in technology spending that helped drive growth in sequential earnings
Top 50 distributor Avnet Inc. reported its fiscal second quarter results today, revealing essentially flat year-over-year sales accompanied by sequential earnings gains that reflect a better than anticipated performance.
The Phoenix-based global distributor of electronic components and technology solutions reported $6.7 billion in sales, a .1% increase compared to the same period a year ago. Earnings per share fell 12% for the quarter but improved more than 70% sequentially, driven by profit growth in its Technology Solutions (TS) business and accelerating growth in its Asia components business, part of the company’s Electronics Marketing (EM) unit.
Avnet CEO Rick Hamada noted that sequential sales growth returned to seasonal trends after below-seasonal growth in the previous two quarters and that revenue exceeded expectations in both of the company’s operating groups. He also pointed to ongoing concerns over the global economy.
“… While our performance this quarter attests to the leverage in our model, our served markets continue to reflect an uneven recovery as questions around global growth trends persist,” Hamada said in a statement announcing the results Thursday. “In this environment, we will continue to react quickly to changes in market conditions and apply our value-based management discipline across the portfolio to drive continued progress toward our long-term goals.”
Avnet EM posted 2% sales growth for the quarter, reflecting double-digit growth in Asia and 10% and 3% declines in the Americas and EMEA (Europe, Middle East and Africa), respectively. Hamada pointed to growth in the company’s high-volume fulfillment business in Asia as a bright spot.
Avnet TS posted a 2% sales decline for the quarter, reflecting 3% and 4% declines in the Americas and EMEA, respectively, and a 5% increase in Asia. Sequential revenue for the quarter grew 36%, driven by higher technology spending—specifically in the software, storage and services business.