Advertisement

News Wire

Avnet Reports Q3

PHOENIX, Ariz. — Avnet, Inc. (NYSE:AVT) today announced results for the third fiscal quarter ended April 2, 2011.

Roy Vallee, Chairman and Chief Executive Officer, commented, “Our revenue in the March quarter was much stronger than expected at both operating groups, driving operating income margin higher sequentially and year over year. This solid performance drove a fourth consecutive quarter of record adjusted EPS with return on capital employed (ROCE) within our target range of 14% – 16%, even as we are integrating our most recent significant investments in value creating M&A. Electronics Marketing delivered another very strong quarter as double-digit organic growth drove both margins and returns above our long-term targets. As the technology markets continue to lead the economic recovery, we remain focused on driving performance across our portfolio of businesses and leveraging revenue growth into increased shareholder value and higher EPS.”

Avnet Electronics Marketing Results

  • Record revenue of $3.93 billion was up 36% year over year while pro forma revenue grew 18%
  • Operating income margin improved 73 basis points year over year and 57 basis points sequentially
  • Return on working capital (ROWC) was up 170 basis points year over year and 380 basis points sequentially Mr. Vallee added, “Demand for electronic components remained strong this quarter as sequential revenue growth of 10% was driven by above normal seasonal trends in all three regions. Growth was strongest in EMEA as high demand in the industrial and automotive markets drove revenue up 23% sequentially and 30% year over year. The combination of strong growth in the western regions, gross profit margin improvements and continued expense efficiencies resulted in operating income growing 2.2 times faster than revenue sequentially while operating income margin increased 57 basis points. ROWC increased 170 basis points year over year and was above our target of 30% globally as EM continues to translate growth into record economic profit. At EM, the book to bill ratio remained positive for the March quarter which indicates that end demand in our served markets remains solid. We are well positioned to continue leveraging our profitable growth initiatives and deliver returns within our target range.”

    Avnet Technology Solutions Results

  • Revenue grew 47% year over year while pro forma revenue grew 13%
  • Operating income grew 15% year over year while operating income margin declined 58 basis points primarily due to the impact of acquisitions
  • Year to date ROWC remains in line with our long-term business model Mr. Vallee further added, “Technology Solutions revenue came in at the high end of expectations as the sequential declines were less than normal for a March quarter in the Americas and Asia regions. Pro forma revenue was down 12% sequentially versus a typical decline of 16% to 20% and was up 12% year over year in constant dollars. At a product level, this year-over-year growth was driven primarily by sales of servers and storage. Operating income margin decreased 58 basis points from the year ago quarter due primarily to the impact of acquisitions while the sequential decline of 119 basis points was worse than seasonal due primarily to product mix. We continue to see progress in recent M+A investments as operating income margin improved from the September quarter in both Latin America and the Asia region as we apply our value-based management discipline and grow the businesses. In EMEA, where the recovery has been weaker than in other regions, we completed the Bell Micro IT conversions which will lead to the realization of additional synergies as planned.”

    Cash Flow

  • Cash generated from operations was $188 million for the quarter and $121 million for the last four quarters
  • Cash and cash equivalents at the end of the quarter was $782 million; net debt (total debt less cash and cash equivalents) was $1.1 billion Ray Sadowski, Chief Financial Officer, stated, “Strong profits combined with excellent working capital management resulted in $188 million of positive cash flow from operations for the quarter. At EM, working capital grew at half the rate of sales as a $22 million sequential decline in inventory contributed to a 2.5 reduction in its overall net days from the December quarter. During the quarter, we used $104 million to retire the Bell Micro convertible notes that were put to us which further strengthened our already strong balance sheet and credit statistics.”

    Read the full press release.

    {complink 577|Avnet Inc.}

  • 0 comments on “Avnet Reports Q3

    Leave a Reply

    This site uses Akismet to reduce spam. Learn how your comment data is processed.