Latest news with #PhilGallagher
Yahoo
06-08-2025
- Business
- Yahoo
Avnet (NASDAQ:AVT) Delivers Strong Q2 Numbers, Provides Optimistic Revenue Guidance for Next Quarter
Electronic components distributor Avnet (NASDAQGS:AVT) reported Q2 CY2025 results beating Wall Street's revenue expectations , but sales were flat year on year at $5.62 billion. Guidance for next quarter's revenue was optimistic at $5.7 billion at the midpoint, 2.9% above analysts' estimates. Its non-GAAP profit of $0.81 per share was 12.5% above analysts' consensus estimates. Is now the time to buy Avnet? Find out in our full research report. Avnet (AVT) Q2 CY2025 Highlights: Revenue: $5.62 billion vs analyst estimates of $5.38 billion (flat year on year, 4.5% beat) Adjusted EPS: $0.81 vs analyst estimates of $0.72 (12.5% beat) Adjusted EBITDA: $97.71 million vs analyst estimates of $155.7 million (1.7% margin, 37.2% miss) Revenue Guidance for Q3 CY2025 is $5.7 billion at the midpoint, above analyst estimates of $5.54 billion Adjusted EPS guidance for Q3 CY2025 is $0.80 at the midpoint, below analyst estimates of $0.90 Operating Margin: 1.3%, down from 3.4% in the same quarter last year Free Cash Flow Margin: 1.4%, down from 4.5% in the same quarter last year Market Capitalization: $4.35 billion 'In fiscal year 2025, we executed well given the overall market environment, and I want to express my gratitude to our team for their dedication in supporting our supplier and customer partners. Thanks to their efforts, we managed costs effectively and made progress on working capital optimization to enhance operating cash flow,' said Avnet Chief Executive Officer Phil Gallagher. Company Overview With a century-long history of adapting to technological evolution, Avnet (NASDAQ:AVT) is a global electronic components distributor that connects manufacturers of semiconductors and other electronic parts with businesses that need these components. Revenue Growth Examining a company's long-term performance can provide clues about its quality. Any business can put up a good quarter or two, but many enduring ones grow for years. With $22.2 billion in revenue over the past 12 months, Avnet is a behemoth in the business services sector and benefits from economies of scale, giving it an edge in distribution. This also enables it to gain more leverage on its fixed costs than smaller competitors and the flexibility to offer lower prices. However, its scale is a double-edged sword because it's challenging to maintain high growth rates when you've already captured a large portion of the addressable market. To accelerate sales, Avnet likely needs to optimize its pricing or lean into new offerings and international expansion. As you can see below, Avnet's 4.7% annualized revenue growth over the last five years was mediocre. This shows it couldn't generate demand in any major way and is a tough starting point for our analysis. Long-term growth is the most important, but within business services, a half-decade historical view may miss new innovations or demand cycles. Avnet's performance shows it grew in the past but relinquished its gains over the last two years, as its revenue fell by 8.5% annually. This quarter, Avnet's $5.62 billion of revenue was flat year on year but beat Wall Street's estimates by 4.5%. Company management is currently guiding for a 1.7% year-on-year increase in sales next quarter. Looking further ahead, sell-side analysts expect revenue to grow 2.2% over the next 12 months. While this projection implies its newer products and services will spur better top-line performance, it is still below the sector average. Here at StockStory, we certainly understand the potential of thematic investing. Diverse winners from Microsoft (MSFT) to Alphabet (GOOG), Coca-Cola (KO) to Monster Beverage (MNST) could all have been identified as promising growth stories with a megatrend driving the growth. So, in that spirit, we've identified a relatively under-the-radar profitable growth stock benefiting from the rise of AI, available to you FREE via this link. Operating Margin Avnet's operating margin might fluctuated slightly over the last 12 months but has generally stayed the same, averaging 3.4% over the last five years. This profitability was lousy for a business services business and caused by its suboptimal cost structure. Looking at the trend in its profitability, Avnet's operating margin might fluctuated slightly but has generally stayed the same over the last five years. This raises questions about the company's expense base because its revenue growth should have given it leverage on its fixed costs, resulting in better economies of scale and profitability. In Q2, Avnet generated an operating margin profit margin of 1.3%, down 2.1 percentage points year on year. This contraction shows it was less efficient because its expenses increased relative to its revenue. Earnings Per Share Revenue trends explain a company's historical growth, but the long-term change in earnings per share (EPS) points to the profitability of that growth – for example, a company could inflate its sales through excessive spending on advertising and promotions. Avnet's EPS grew at a remarkable 11.2% compounded annual growth rate over the last five years, higher than its 4.7% annualized revenue growth. However, this alone doesn't tell us much about its business quality because its operating margin didn't improve. Like with revenue, we analyze EPS over a more recent period because it can provide insight into an emerging theme or development for the business. For Avnet, its two-year annual EPS declines of 34.7% mark a reversal from its (seemingly) healthy five-year trend. We hope Avnet can return to earnings growth in the future. In Q2, Avnet reported adjusted EPS at $0.81, down from $1.22 in the same quarter last year. Despite falling year on year, this print easily cleared analysts' estimates. Over the next 12 months, Wall Street expects Avnet's full-year EPS of $3.44 to grow 49.1%. Key Takeaways from Avnet's Q2 Results We were impressed by Avnet's optimistic revenue guidance for next quarter, which blew past analysts' expectations. We were also glad its revenue outperformed Wall Street's estimates. On the other hand, its EPS guidance for next quarter missed. Overall, we think this was a solid quarter with some key areas of upside. Investors were likely hoping for more, and shares traded down 1.3% to $51.20 immediately after reporting. Big picture, is Avnet a buy here and now? If you're making that decision, you should consider the bigger picture of valuation, business qualities, as well as the latest earnings. We cover that in our actionable full research report which you can read here, it's free.
Business Wire
06-08-2025
- Business
- Business Wire
Avnet Reports Fourth Quarter and Fiscal 2025 Financial Results
PHOENIX--(BUSINESS WIRE)--Avnet, Inc. (Nasdaq: AVT) today announced results for its fourth quarter and fiscal year 2025 ended June 28, 2025. 'In fiscal year 2025, we executed well given the overall market environment, and I want to express my gratitude to our team for their dedication in supporting our supplier and customer partners. Thanks to their efforts, we managed costs effectively and made progress on working capital optimization to enhance operating cash flow,' said Avnet Chief Executive Officer Phil Gallagher. 'We remain optimistic about the recovery led by steady growth in our Asia region and the return of Farnell to year-over-year growth, which enabled us to surpass the high end of our fourth-quarter sales and earnings guidance. We are encouraged by these positive signals as we start the new fiscal year.' Fiscal Fourth Quarter Key Financial Highlights: Sales of $5.6 billion, compared with $5.6 billion in the prior year quarter. Fourth consecutive quarter of year-over-year sales growth in Asia. Diluted earnings per share of $0.07, compared with $0.91 in the prior year quarter. Adjusted diluted earnings per share of $0.81, compared with $1.22 in the prior year quarter. Operating income margin of 1.3%, compared with 3.0% in the prior year quarter. Adjusted operating income margin of 2.5%, compared with 3.5% in the prior year quarter. Generated $139 million of cash flow from operations. Returned $50 million to shareholders from share repurchases, representing 1.3% of shares outstanding. Returned $28 million to shareholders in dividends. Fiscal 2025 Key Financial Highlights: Sales of $22.2 billion, compared with $23.8 billion in the prior year. Diluted earnings per share of $2.75, compared with $5.43 in the prior year. Adjusted diluted earnings per share of $3.44, compared with $5.34 in the prior year. Operating income margin of 2.3%, compared with 3.6% in the prior year. Adjusted operating income margin of 2.8%. Generated $725 million of cash flow from operations. Returned $301 million to shareholders from share repurchases, representing 6.7% of shares outstanding. Returned $113 million to shareholders in dividends. Reduced inventories by $414 million in constant currency. _________________________ (1) A reconciliation of non-GAAP financial measures to GAAP financial measures is presented in the 'Non-GAAP Financial Information' section of this press release. Expand _________________________ (1) A reconciliation of non-GAAP guidance to GAAP guidance is presented in the 'Non-GAAP Financial Information' section of this press release. Expand The above guidance implies sequential sales growth of approximately 2% at the midpoint and assumes sales growth across all regions. The above guidance also excludes restructuring, integration and other expenses, foreign currency gains and losses, and certain income tax adjustments. The above guidance assumes similar interest expense to the fourth quarter of fiscal 2025 and an adjusted effective tax rate of between 22% and 26%. The above guidance assumes 85 million average diluted shares outstanding and average currency exchange rates as shown in the table below: Today's Conference Call and Webcast Details Avnet will host a conference call and webcast today at 9:00 a.m. PT / Noon ET to discuss its financial results, provide a business update and answer questions. Forward-Looking Statements This document contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, with respect to the financial condition, results of operations, and business of the Company. You can find many of these statements by looking for words like 'believes,' 'projected,' 'plans,' 'expects,' 'anticipates,' 'should,' 'will,' 'may,' 'estimates,' or similar expressions. These forward-looking statements are subject to numerous assumptions, risks, and uncertainties. The following important factors, in addition to those discussed elsewhere in the Company's Annual Report on Form 10-K for the fiscal year ended June 29, 2024 and subsequent Quarterly Reports on Form 10-Q and Current Reports on Form 8-K, could affect the Company's future results of operations, and could cause those results or other outcomes to differ materially from those expressed or implied in the forward-looking statements: geopolitical events and military conflicts; pandemics and other health-related crises; competitive pressures among distributors of electronic components; an industry down-cycle in semiconductors; relationships with key suppliers and allocations of products by suppliers; accounts receivable defaults; risks relating to the Company's international sales and operations, including risks relating to repatriating cash, foreign currency fluctuations, inflation, duties and taxes, tariffs, sanctions and trade restrictions, and compliance with international and U.S. laws; risks relating to acquisitions, divestitures, and investments; adverse effects on the Company's supply chain, operations of its distribution centers, shipping costs, third-party service providers, customers, and suppliers, including as a result of issues caused by military conflicts, terrorist attacks, natural and weather-related disasters, pandemics and health related crises, warehouse modernization, and relocation efforts; risks related to cyber security attacks, other privacy and security incidents, and information systems failures, including related to current or future implementations, integrations, and upgrades; general economic and business conditions (domestic, foreign, and global) affecting the Company's operations and financial performance and, indirectly, the Company's credit ratings, debt covenant compliance, liquidity, and access to financing; constraints on employee retention and hiring; and legislative or regulatory changes. Any forward-looking statement speaks only as of the date on which that statement is made. Except as required by law, the Company assumes no obligation to update any forward-looking statement to reflect events or circumstances that occur after the date on which the statement is made. About Avnet As a leading global technology distributor and solutions provider, Avnet has served customers' evolving needs for more than a century. Through regional and specialized businesses around the world, we support customers and suppliers at every stage of the product lifecycle. We help companies adapt to change and accelerate the design and supply stages of product development. With a unique viewpoint from the center of the technology value chain, Avnet is a trusted partner that solves complex design and supply chain issues so customers can realize revenue faster. Learn more about Avnet at (AVT_IR) AVNET, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) June 28, June 29, 2025 2024 (Thousands) ASSETS Current assets: Cash and cash equivalents $ 192,428 $ 310,941 Receivables 4,327,450 4,391,187 Inventories 5,235,485 5,468,730 Prepaid and other current assets 263,374 199,694 Total current assets 10,018,737 10,370,552 Property, plant and equipment, net 667,247 568,169 Goodwill 837,031 780,984 Operating lease assets 201,896 208,971 Other assets 393,642 280,471 Total assets $ 12,118,553 $ 12,209,147 LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Short-term debt $ 87,284 $ 492,711 Accounts payable 3,487,419 3,345,510 Accrued expenses and other 497,154 573,055 Short-term operating lease liabilities 56,247 53,993 Total current liabilities 4,128,104 4,465,269 Long-term debt 2,574,729 2,406,629 Long-term operating lease liabilities 159,449 173,886 Other liabilities 244,776 237,859 Total liabilities 7,107,058 7,283,643 Shareholders' equity 5,011,495 4,925,504 Total liabilities and shareholders' equity $ 12,118,553 $ 12,209,147 Expand AVNET, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) Years Ended June 28, June 29, 2025 2024 (Thousands) Cash flows from operating activities: Net income $ 240,217 $ 498,699 Non-cash and other reconciling items: Depreciation and amortization 71,616 86,708 Amortization of operating lease assets 53,579 53,796 Deferred income taxes (105,412 ) (9,749 ) Stock-based compensation 36,399 33,496 Other, net 25,942 15,800 Changes in (net of effects from businesses acquired and divested): Receivables 183,533 316,218 Inventories 409,553 (51,203 ) Accounts payable 101,702 4,496 Accrued expenses and other, net (292,625 ) (258,277 ) Net cash flows provided by operating activities 724,504 689,984 Cash flows from financing activities: Borrowings (repayments) under accounts receivable securitization, net 84,900 (140,700 ) Repayments under senior unsecured credit facility, net (357,299 ) (43,277 ) (Repayments) borrowings under bank credit facilities and other debt, net (2,451 ) 27,491 Repurchases of common stock (303,490 ) (162,723 ) Dividends paid on common stock (113,310 ) (111,963 ) Other, net (1,876 ) (2,627 ) Net cash flows used for financing activities (693,526 ) (433,799 ) Cash flows from investing activities: Purchases of property, plant and equipment (147,474 ) (226,478 ) Other, net 10,347 994 Net cash flows used for investing activities (137,127 ) (225,484 ) Effect of currency exchange rate changes on cash and cash equivalents (12,364 ) (7,990 ) Cash and cash equivalents: — (decrease) increase (118,513 ) 22,711 — at beginning of period 310,941 288,230 — at end of period $ 192,428 $ 310,941 Expand Non-GAAP Financial Information In addition to disclosing financial results that are determined in accordance with generally accepted accounting principles in the United States ('GAAP'), the Company also discloses certain non-GAAP financial information including (i) adjusted operating income, (ii) adjusted other income (expense), (iii) adjusted income before income taxes, (iv) adjusted income tax expense (benefit), and (v) adjusted diluted earnings per share. There are also references to the impact of foreign currency in the discussion of the Company's results of operations. When the U.S. Dollar strengthens and the stronger exchange rates of the current year are used to translate the results of operations of Avnet's subsidiaries denominated in foreign currencies, the resulting impact is a decrease in U.S. Dollars of reported results. Conversely, when the U.S. Dollar weakens and the weaker exchange rates of the current year are used to translate the results of operations of Avnet's subsidiaries denominated in foreign currencies, the resulting impact is an increase in U.S. Dollars of reported results. In the discussion of the Company's results of operations, results excluding this impact are referred to as 'constant currency.' Management believes sales in constant currency is a useful measure for evaluating current period performance as compared with prior periods and for understanding underlying trends. In order to determine the translation impact of changes in foreign currency exchange rates on sales, income or expense items for subsidiaries reporting in currencies other than the U.S. Dollar, the Company adjusts the average exchange rates used in current periods to be consistent with the average exchange rates in effect during the comparative period. Management believes that operating income adjusted for restructuring, integration and other expenses, and amortization of acquired intangible assets, is a useful measure to help investors better assess and understand the Company's operating performance. This is especially the case when comparing results with previous periods or forecasting performance for future periods, primarily because management views the excluded items to be outside of Avnet's normal operating results or non-cash in nature. Management analyzes operating income without the impact of these items as an indicator of ongoing margin performance and underlying trends in the business. Management also uses these non-GAAP measures to establish operational goals and, in most cases, for measuring performance for compensation purposes. Management measures operating income for its reportable segments excluding restructuring, integration and other expenses, and amortization of acquired intangible assets and other. Management also believes income tax expense (benefit), net income and diluted earnings per share adjusted for the impact of the items described above, gain on legal settlements and other, foreign currency gains and losses and certain items impacting income tax expense (benefit) are useful to investors because they provide a measure of the Company's net profitability on a more comparable basis to historical periods and provide a more meaningful basis for forecasting future performance. Adjustments to income tax expense (benefit) and the effective income tax rate include the effect of changes in tax laws, certain changes in valuation allowances and unrecognized tax benefits, income tax audit settlements and adjustments to the effective tax rate based upon the expected long-term adjusted effective tax rate. Additionally, because of management's focus on generating shareholder value, of which net profitability is a primary driver, management believes net income and diluted earnings per share excluding the impact of these items provides an important measure of the Company's net profitability for the investing public. Additional non-GAAP metrics management uses are adjusted operating income margin, which is defined as adjusted operating income divided by sales and the adjusted effective income tax rate, which is defined as adjusted income tax expense divided by adjusted income before income taxes. Any analysis of results and outlook on a non-GAAP basis should be used as a complement to, and in conjunction with, results presented in accordance with GAAP. Quarters Ended Fiscal Year June 29, March 30, December 30, September 30, 2024* 2024* 2024* 2023 2023 ($ in thousands, except per share amounts) GAAP operating income $ 844,367 $ 164,189 $ 190,151 $ 236,257 $ 253,769 Restructuring, integration, and other expenses 52,550 28,417 11,847 5,235 7,051 Amortization of intangible assets 3,130 828 712 712 878 Adjusted operating income 900,047 193,434 202,710 242,204 261,698 GAAP other (expense) income, net $ (15,736 ) $ 1,409 $ (14,707 ) $ (8,397 ) $ 5,960 Foreign currency loss (gain) and other, net 27,730 680 17,850 9,200 — Adjusted other (expense) income, net 11,994 2,089 3,143 803 5,960 GAAP income before income taxes $ 632,263 $ 101,324 $ 101,948 $ 153,558 $ 275,432 Restructuring, integration, and other expenses 52,550 28,417 11,847 5,235 7,051 Amortization of intangible assets 3,130 828 712 712 878 Foreign currency loss (gain) and other, net 27,730 680 17,850 9,200 — Gain on legal settlements and other (86,499 ) — — — (86,499 ) Adjusted income before income taxes 629,174 131,249 132,357 168,705 196,862 GAAP income tax expense $ 133,564 $ 18,659 $ 13,114 $ 35,627 $ 66,164 Restructuring, integration, and other expenses 13,000 7,251 2,772 1,274 1,703 Amortization of intangible assets 700 185 156 156 203 Foreign currency loss (gain) and other, net 7,373 88 5,251 2,034 — Gain on legal settlements and other (20,434 ) — — — (20,434 ) Income tax expense items, net 4,992 (6,489 ) 10,472 1,399 (390 ) Adjusted income tax expense 139,195 19,694 31,765 40,490 47,246 GAAP net income $ 498,699 $ 82,665 $ 88,834 $ 117,931 $ 209,268 Restructuring, integration, and other expenses (net of tax) 39,550 21,166 9,075 3,961 5,348 Amortization of intangible assets (net of tax) 2,430 643 556 556 675 Foreign currency loss (gain) and other, net (net of tax) 20,357 592 12,599 7,166 — Gain on legal settlements and other (net of tax) (66,065 ) — — — (66,065 ) Income tax expense items, net (4,992 ) 6,489 (10,472 ) (1,399 ) 390 Adjusted net income 489,979 111,555 100,592 128,215 149,616 GAAP diluted earnings per share $ 5.43 $ 0.91 $ 0.97 $ 1.28 $ 2.25 Restructuring, integration, and other expenses (net of tax) 0.43 0.23 0.10 0.04 0.06 Amortization of intangible assets (net of tax) 0.03 0.01 0.01 0.01 0.01 Foreign currency loss (gain) and other, net (net of tax) 0.22 0.01 0.14 0.08 — Gain on legal settlements and other (net of tax) (0.72 ) — — — (0.71 ) Income tax expense items, net (0.05 ) 0.07 (0.11 ) (0.01 ) 0.00 Adjusted diluted EPS 5.34 1.22 1.10 1.40 1.61 ________________________________ * May not foot/cross foot due to rounding. Expand Sales in Constant Currency The following table presents the percentage change in sales and the percentage change in sales in constant currency for the fourth quarter and fiscal year 2025 compared to the fourth quarter and fiscal year 2024. Historical Segment Financial Information 2025* 2025 2025 2024 2024 ($ in millions) Sales: Electronic Components $ 20,755.0 $ 5,231.3 $ 4,948.7 $ 5,317.8 $ 5,257.1 Farnell 1,445.8 386.5 366.7 345.6 347.1 Avnet sales $ 22,200.8 $ 5,617.8 $ 5,315.4 $ 5,663.4 $ 5,604.2 Operating income: Electronic Components $ 708.2 $ 157.0 $ 172.2 $ 181.6 $ 197.4 Farnell 32.8 16.5 11.0 3.5 1.9 741.0 173.5 183.2 185.1 199.3 Corporate expenses (116.9 ) (30.6 ) (30.4 ) (25.6 ) (30.3 ) Restructuring, integration, and other expenses (108.3 ) (69.1 ) (9.1 ) (3.8 ) (26.4 ) Amortization of acquired intangible assets (1.5 ) (0.4 ) (0.4 ) (0.4 ) (0.4 ) Avnet operating income $ 514.3 $ 73.4 $ 143.3 $ 155.3 $ 142.2 Sales by geographic area: Americas $ 5,300.0 $ 1,327.0 $ 1,274.2 $ 1,368.8 $ 1,329.9 EMEA 6,409.6 1,599.7 1,559.0 1,582.8 1,668.2 Asia 10,491.2 2,691.1 2,482.2 2,711.8 2,606.1 Avnet sales $ 22,200.8 $ 5,617.8 $ 5,315.4 $ 5,663.4 $ 5,604.2 Sales Mix by geographic area: Americas 23.9 % 23.6 % 24.0 % 24.2 % 23.7 % EMEA 28.9 % 28.5 % 29.3 % 27.9 % 29.8 % Asia 47.2 % 47.9 % 46.7 % 47.9 % 46.5 % ________________________________ * May not foot/cross foot due to rounding. Expand Quarters Ended 2024* 2024 2024 2023 2023 ($ in millions) Sales: Electronic Components $ 22,160.0 $ 5,187.8 $ 5,245.8 $ 5,812.1 $ 5,914.4 Farnell 1,597.1 375.2 407.8 392.8 421.2 Avnet sales $ 23,757.1 $ 5,563.0 $ 5,653.6 $ 6,204.9 $ 6,335.6 Operating income: Electronic Components $ 947.6 $ 210.1 $ 216.9 $ 247.9 $ 272.8 Farnell 64.8 15.1 16.3 15.7 17.7 1,012.4 225.2 233.2 263.6 290.5 Corporate expenses (112.3 ) (31.8 ) (30.5 ) (21.4 ) (28.7 ) Restructuring, integration, and other expenses (52.6 ) (28.4 ) (11.8 ) (5.2 ) (7.1 ) Amortization of acquired intangible assets (3.1 ) (0.8 ) (0.7 ) (0.7 ) (0.9 ) Avnet operating income $ 844.4 $ 164.2 $ 190.2 $ 236.3 $ 253.8 Sales by geographic area: Americas $ 5,919.2 $ 1,353.8 $ 1,403.4 $ 1,588.5 $ 1,573.5 EMEA 8,395.0 1,920.3 2,053.1 2,113.6 2,308.0 Asia 9,442.9 2,288.9 2,197.1 2,502.8 2,454.1 Avnet sales $ 23,757.1 $ 5,563.0 $ 5,653.6 $ 6,204.9 $ 6,335.6 Sales Mix by geographic area: Americas 24.9 % 24.3 % 24.8 % 25.6 % 24.8 % EMEA 35.3 % 34.5 % 36.3 % 34.1 % 36.4 % Asia 39.8 % 41.2 % 38.9 % 40.3 % 38.8 % ________________________________ * May not foot/cross foot due to rounding. Expand Guidance Reconciliation The following table presents the reconciliation of non-GAAP adjusted diluted earnings per share guidance to the expected GAAP diluted earnings per share guidance for the first quarter of fiscal 2026.
Business Wire
23-07-2025
- Business
- Business Wire
Avnet to Report Fourth Quarter and Fiscal Year 2025 Earnings on August 6 and to Hold Annual Shareholder Meeting on November 21
PHOENIX--(BUSINESS WIRE)-- Avnet (Nasdaq: AVT), a global technology solutions company, today announced it will report financial results for the fourth quarter and fiscal year 2025 on August 6, 2025 before the market opens. Following the earnings release, Avnet's Chief Executive Officer Phil Gallagher and Chief Financial Officer Ken Jacobson will host a webcast and conference call at 9:00 a.m. PT / Noon ET to discuss the financial results and provide a corporate update. Avnet's Board has also scheduled the Annual Meeting of Shareholders for Friday, November 21, 2025 at 8:00 a.m. Phoenix, Arizona time. The meeting will be held at Avnet's Corporate Headquarters located at: 2211 South 47th Street, Phoenix, Arizona 85034. The record date for determining the common shareholders entitled to vote at the meeting has been set at the close of business on September 22, 2025. Earnings Conference Call and Webcast Details To participate in the live call, dial 877-407-8112 or 201-689-8840. The live webcast along with slides can be accessed via Avnet's Investor Relations web page at An audio replay of the webcast will be available after the completion of the call and archived on the Avnet website for one year. About Avnet As a leading global technology distributor and solutions provider, Avnet has served customers' evolving needs for more than a century. Through regional and specialized businesses around the world, we support customers and suppliers at every stage of the product lifecycle. We help companies adapt to change and accelerate the design and supply stages of product development. With a unique viewpoint from the center of the technology value chain, Avnet is a trusted partner that solves complex design and supply chain issues so customers can realize revenue faster. Learn more about Avnet at (AVT_IR)
Yahoo
14-05-2025
- Business
- Yahoo
AVT Q1 Earnings Call: Revenue Meets Expectations, Guidance Trails Analyst Estimates
Electronic components distributor Avnet (NASDAQGS:AVT) met Wall Street's revenue expectations in Q1 CY2025, but sales fell by 6% year on year to $5.32 billion. On the other hand, next quarter's revenue guidance of $5.3 billion was less impressive, coming in 0.9% below analysts' estimates. Its non-GAAP profit of $0.84 per share was 17.4% above analysts' consensus estimates. Is now the time to buy AVT? Find out in our full research report (it's free). Revenue: $5.32 billion vs analyst estimates of $5.29 billion (6% year-on-year decline, in line) Adjusted EPS: $0.84 vs analyst estimates of $0.71 (17.4% beat) Adjusted EBITDA: $181.7 million vs analyst estimates of $161.6 million (3.4% margin, 12.5% beat) Revenue Guidance for Q2 CY2025 is $5.3 billion at the midpoint, below analyst estimates of $5.35 billion Adjusted EPS guidance for Q2 CY2025 is $0.70 at the midpoint, below analyst estimates of $0.90 Operating Margin: 2.9%, in line with the same quarter last year Free Cash Flow Margin: 2.1%, down from 8.1% in the same quarter last year Market Capitalization: $4.39 billion Avnet's first quarter results were primarily driven by continued softness in Western markets and ongoing customer inventory destocking, offset by stronger-than-anticipated performance in Asia and incremental improvements at Farnell, its distribution business. CEO Phil Gallagher cited Asia's third consecutive quarter of year-over-year growth and highlighted ongoing stabilization efforts in Europe, noting, 'Asia was the only region with year-on-year sales growth. In EMEA, we continue to experience weak demand across the region.' Looking ahead, Avnet's guidance for next quarter reflects persistent headwinds in key Western markets and heightened tariff-related uncertainty. Management emphasized caution around geopolitical factors and the complexity of new tariffs on goods from China, with Gallagher stating, 'Our team has made a significant effort to adjust our processes for this latest round of tariffs.' The company expects muted revenue trends and is focused on maintaining operational discipline while managing supply chain challenges and evolving customer demand patterns. Avnet's management attributed the latest quarter's results to stable but challenging market conditions, ongoing customer inventory adjustments, and regional disparities in demand. Key themes included efforts to optimize inventory, manage tariffs, and drive incremental improvements at Farnell. Asia Outperforms, Western Weakness: Asia delivered year-over-year sales growth for the third straight quarter, aided by some customer pull-ins related to regulatory uncertainty, while Europe (EMEA) continued to experience broad-based demand weakness. Customer Destocking Continues: Customers across most regions remained focused on reducing their inventories, leading to lower backlog and shorter lead times. Cancellations were described as normal, but management does not foresee a rapid recovery from the destocking cycle. Farnell Progresses on Turnaround: The Farnell business, which caters to industrial and electronic component customers, posted sequential improvement in sales and margin. Management credited new leadership and operational streamlining for these early gains, but emphasized that further improvement is needed to reach mid- to high-single-digit margins. Tariff Mitigation Efforts: In response to new tariffs on goods from China, Avnet is leveraging its global logistics, alternative sourcing, and foreign trade zone capabilities to minimize impact on customers. Management noted that about 7%-10% of Americas sales are affected by these tariffs, and efforts are underway to pass through or offset costs where possible. Inventory Strategy Adjustments: Avnet views its inventory as a strategic asset, balancing reductions in excess stock with the need to support customer requirements. Management acknowledged that while some inventory is elevated, other product lines require further investment to remain competitive and responsive to demand shifts. Avnet's outlook centers on ongoing regional imbalances, continued customer inventory correction, and adapting to new tariff regimes. Management expects these themes to shape revenue and margin trends in the coming quarters. Tariffs and Geopolitical Uncertainty: Management highlighted the dynamic nature of U.S.-China tariffs and associated supply chain complexity. The company's ability to mitigate tariff effects and adjust sourcing will influence both customer demand and margin profile. Inventory Normalization Pace: The speed at which customers complete inventory destocking will affect Avnet's sales trajectory. Prolonged correction periods may delay revenue recovery, while faster normalization could support a rebound. Farnell Operational Execution: Continued progress at Farnell—driven by cost control, SKU expansion, and process improvements—remains a key lever for improving group profitability. Management aims for steady margin increases but cautioned that significant gains will take time. Joe Quatrochi (Wells Fargo): Asked why Avnet's revenue guidance was lower than some suppliers' growth outlooks. CFO Ken Jacobson explained that ongoing weakness in Europe and the Americas offsets strength in Asia, describing the guidance as neither conservative nor aggressive. Joe Quatrochi (Wells Fargo): Inquired about the impact of new tariffs and supply chain services. Jacobson emphasized Avnet's global footprint and ability to shift sourcing, but noted that tariffs on Chinese goods are largely unavoidable and must be passed through or mitigated. William Stein (Truist): Requested detail on Farnell's improved margins and long-term strategy. CEO Phil Gallagher said progress is encouraging, attributing gains to new leadership and operational efficiency, while reaffirming the goal of achieving higher margins over several quarters. William Stein (Truist): Questioned Avnet's inventory approach and whether higher inventory levels are a permanent strategy. Management reiterated that inventory is a strategic asset but intends to reduce excess stock where possible. Wamsi Mohan (BofA): Asked about order patterns related to tariffs and visibility into AI-related component demand. Gallagher reported only modest order pull-ins and estimated AI-driven sales at 3%-5% of Asia-Pacific business, with potential for future growth. In the upcoming quarters, the StockStory team will watch (1) whether destocking trends in Western markets begin to moderate, supporting a sales recovery; (2) the effectiveness of Avnet's strategies to offset or pass through the impact of new tariffs on its Americas business; and (3) continued operational improvements at Farnell, particularly in achieving margin expansion. Additionally, we will monitor Avnet's inventory management as a signal of supply-demand normalization. Avnet currently trades at a forward P/E ratio of 10.3×. Should you load up, cash out, or stay put? Find out in our free research report. Donald Trump's victory in the 2024 U.S. Presidential Election sent major indices to all-time highs, but stocks have retraced as investors debate the health of the economy and the potential impact of tariffs. While this leaves much uncertainty around 2025, a few companies are poised for long-term gains regardless of the political or macroeconomic climate, like our Top 5 Strong Momentum Stocks for this week. This is a curated list of our High Quality stocks that have generated a market-beating return of 176% over the last five years. Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-small-cap company Comfort Systems (+782% five-year return). Find your next big winner with StockStory today. Sign in to access your portfolio
Yahoo
30-04-2025
- Business
- Yahoo
Avnet (NASDAQ:AVT) Posts Q1 Sales In Line With Estimates But Stock Drops
Electronic components distributor Avnet (NASDAQGS:AVT) met Wall Street's revenue expectations in Q1 CY2025, but sales fell by 6% year on year to $5.32 billion. On the other hand, next quarter's revenue guidance of $5.3 billion was less impressive, coming in 3.3% below analysts' estimates. Its non-GAAP profit of $0.84 per share was 17.6% above analysts' consensus estimates. Is now the time to buy Avnet? Find out in our full research report. Revenue: $5.32 billion vs analyst estimates of $5.29 billion (6% year-on-year decline, in line) Adjusted EPS: $0.84 vs analyst estimates of $0.71 (17.6% beat) Adjusted EBITDA: $169.1 million vs analyst estimates of $161.6 million (3.2% margin, 4.7% beat) Revenue Guidance for Q2 CY2025 is $5.3 billion at the midpoint, below analyst estimates of $5.48 billion Adjusted EPS guidance for Q2 CY2025 is $0.70 at the midpoint, below analyst estimates of $0.90 Operating Margin: 2.7%, down from 3.7% in the same quarter last year Free Cash Flow Margin: 2.1%, down from 8.1% in the same quarter last year Market Capitalization: $4.43 billion 'We are pleased with our third quarter results, with revenue and earnings exceeding our expectations,' said Avnet Chief Executive Officer Phil Gallagher. With a century-long history of adapting to technological evolution, Avnet (NASDAQ:AVT) is a global electronic components distributor that connects manufacturers of semiconductors and other electronic parts with businesses that need these components. A company's long-term sales performance can indicate its overall quality. Any business can put up a good quarter or two, but many enduring ones grow for years. With $22.15 billion in revenue over the past 12 months, Avnet is a behemoth in the business services sector and benefits from economies of scale, giving it an edge in distribution. This also enables it to gain more leverage on its fixed costs than smaller competitors and the flexibility to offer lower prices. However, its scale is a double-edged sword because it's harder to find incremental growth when you've penetrated most of the market. To accelerate sales, Avnet likely needs to optimize its pricing or lean into new offerings and international expansion. As you can see below, Avnet's sales grew at a mediocre 4.1% compounded annual growth rate over the last five years. This shows it couldn't generate demand in any major way and is a tough starting point for our analysis. Long-term growth is the most important, but within business services, a half-decade historical view may miss new innovations or demand cycles. Avnet's performance shows it grew in the past but relinquished its gains over the last two years, as its revenue fell by 8.3% annually. This quarter, Avnet reported a rather uninspiring 6% year-on-year revenue decline to $5.32 billion of revenue, in line with Wall Street's estimates. Company management is currently guiding for a 4.7% year-on-year decline in sales next quarter. Looking further ahead, sell-side analysts expect revenue to grow 3% over the next 12 months. Although this projection implies its newer products and services will catalyze better top-line performance, it is still below the sector average. Here at StockStory, we certainly understand the potential of thematic investing. Diverse winners from Microsoft (MSFT) to Alphabet (GOOG), Coca-Cola (KO) to Monster Beverage (MNST) could all have been identified as promising growth stories with a megatrend driving the growth. So, in that spirit, we've identified a relatively under-the-radar profitable growth stock benefiting from the rise of AI, available to you FREE via this link. Avnet was profitable over the last five years but held back by its large cost base. Its average operating margin of 3.5% was weak for a business services business. On the plus side, Avnet's operating margin rose by 1.6 percentage points over the last five years, as its sales growth gave it operating leverage. In Q1, Avnet generated an operating profit margin of 2.7%, down 1 percentage points year on year. This reduction is quite minuscule and indicates the company's overall cost structure has been relatively stable. We track the long-term change in earnings per share (EPS) for the same reason as long-term revenue growth. Compared to revenue, however, EPS highlights whether a company's growth is profitable. Avnet's EPS grew at a remarkable 10.5% compounded annual growth rate over the last five years, higher than its 4.1% annualized revenue growth. This tells us the company became more profitable on a per-share basis as it expanded. Diving into the nuances of Avnet's earnings can give us a better understanding of its performance. As we mentioned earlier, Avnet's operating margin declined this quarter but expanded by 1.6 percentage points over the last five years. Its share count also shrank by 12.7%, and these factors together are positive signs for shareholders because improving profitability and share buybacks turbocharge EPS growth relative to revenue growth. In Q1, Avnet reported EPS at $0.84, down from $1.10 in the same quarter last year. Despite falling year on year, this print easily cleared analysts' estimates. Over the next 12 months, Wall Street expects Avnet's full-year EPS of $3.85 to grow 32.5%. We were impressed by how significantly Avnet blew past analysts' EPS and EBITDA expectations this quarter. On the other hand, its revenue and EPS guidance for next quarter fell short of Wall Street's estimates. Overall, this quarter could have been better. The stock traded down 7.3% to $47.50 immediately after reporting. Avnet may have had a tough quarter, but does that actually create an opportunity to invest right now? If you're making that decision, you should consider the bigger picture of valuation, business qualities, as well as the latest earnings. We cover that in our actionable full research report which you can read here, it's free.
