The Computer and Technology group has plenty of great stocks, but investors should always be looking for companies that are outperforming their peers. Has Avnet (AVT) been one of those stocks this year? A quick glance at the company's year-to-date performance in comparison to the rest of the Computer and Technology sector should help us answer this question.Avnet is one of 611 companies in the Computer and Technology group. The Computer and Technology group currently sits at #2 within the Zacks Sector Rank. ...

Company Performance - Avnet's shares have increased by 26.5% over the past month, reaching a new 52-week high of $63.1 [1] - Year-to-date, Avnet has gained 29.8%, outperforming the Zacks Computer and Technology sector's 27.8% and the Zacks Electronics - Parts Distribution industry's 38.4% [1] Earnings and Revenue Expectations - Avnet has consistently beaten earnings estimates, with an EPS of $1.05 reported against a consensus estimate of $0.95 in the last earnings report [2] - For the current fiscal year, Avnet is projected to achieve earnings of $4.46 per share on revenues of $24.15 billion, reflecting a 29.65% increase in EPS and an 8.77% increase in revenues [3] - The next fiscal year is expected to see earnings of $6.63 per share on revenues of $24.85 billion, indicating a year-over-year change of 48.71% in EPS and 2.9% in revenues [3] Valuation Metrics - Avnet's stock trades at 14X current fiscal year EPS estimates, below the peer industry average of 16.2X [7] - On a trailing cash flow basis, the stock trades at 12.3X compared to the peer group's average of 14.2X [7] - The stock has a PEG ratio of 0.48, positioning it favorably among value investors [7] Zacks Rank and Style Scores - Avnet holds a Zacks Rank of 2 (Buy) due to a strong earnings estimate revision trend [8] - The stock has a Value Score of A, along with Growth and Momentum Scores of A, resulting in a combined VGM Score of A [6] Industry Comparison - WESCO International, a peer in the industry, also has a Zacks Rank of 2 (Buy) and shows strong earnings performance, with expected earnings of $15.73 per share on revenues of $23.48 billion [10] - WESCO's shares have increased by 14.8% over the past month, trading at a forward P/E of 18.4X and a P/CF of 16.14X [11] - The Electronics - Parts Distribution industry is performing well, ranking in the top 8% of all industries, providing favorable conditions for both Avnet and WESCO [11]

FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended December 27, 2025 ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _____ to _____ Commission File #1-4224 Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 (Exact name of registrant as specified in its charter) (State or other jurisdiction (IRS Employer of incorporati ...

Core Insights - Avnet, Inc. (AVT) shares increased by 13.8% following the release of better-than-expected second-quarter fiscal 2026 results, with adjusted earnings of $1.05 per share exceeding the Zacks Consensus Estimate by 10.53% and showing a year-over-year increase of 20.7% [1][10] Financial Performance - Net sales rose by 11.6% year over year to $6.32 billion, surpassing the consensus estimate by 5.28%, driven by strong performance across operating segments [2][10] - The Electronic Components segment's revenue increased by 10.8% year over year to $5.89 billion, exceeding the estimate of $5.6 billion [3] - Farnell sales surged by 23.6% year over year to $427.1 million, outperforming the estimate of $400.8 million [3] Regional Sales Performance - Year-over-year sales growth included a 16.9% increase in Asia to $3.17 billion, a 4.9% increase in the Americas to $1.44 billion, and an 8.3% increase in EMEA to $1.71 billion [4] Operating Income and Margins - Adjusted operating income was $171.7 million, a 7.7% increase year over year, with the Electronic Components segment's operating income rising 3% to $187.1 million [4] - The adjusted operating margin decreased by 10 basis points to 2.7%, with the Electronic Components margin contracting by 20 basis points to 3.2%, while Farnell's margin improved by 370 basis points to 4.7% [5] Balance Sheet and Cash Flow - As of December 27, 2025, cash and cash equivalents were $286.5 million, up from $175.5 million as of September 27, 2025, while long-term debt decreased to $2.47 billion from $2.79 billion [6] - Operating cash flow for the second quarter was $208 million, with $28 million paid in dividends and $138.3 million in share repurchases during the first half of fiscal 2026 [7] Future Guidance - For the third quarter of fiscal 2026, Avnet expects revenues between $6.2 billion and $6.5 billion, with a midpoint of $6.35 billion, indicating a year-over-year increase of 9.1% [8] - Non-GAAP earnings are anticipated to be between $1.20 and $1.30 per share, with the consensus estimate at $1.22, suggesting a year-over-year increase of 45.2% [8]

Core Insights - Avnet reported second-quarter fiscal 2026 results that exceeded the high end of the company's sales and earnings guidance, driven by record revenue in Asia and improved demand across multiple end markets [5][7] Financial Performance - Adjusted operating income was $172 million with a total adjusted operating margin of 2.7% [1] - Sales reached $6.3 billion, representing a 12% year-over-year increase and a 7% sequential increase, surpassing guidance [3][7] - Adjusted diluted earnings per share (EPS) were $1.05, exceeding the high end of guidance for the quarter [7] - Gross margin was reported at 10.5%, described as "flattish" year-over-year and slightly up sequentially [2] Segment Performance - Electronic components generated an operating income of $187 million with a 3.2% operating margin, while Farnell produced an operating income of $20 million with a 4.7% operating margin, the latter being the highest since fiscal 2023 [1][4] - Farnell's gross margins improved by over 100 basis points year-over-year but decreased by 25 basis points sequentially [2] Regional Highlights - Asia sales exceeded $3 billion, marking the sixth consecutive quarter of year-over-year growth and now account for over 50% of total sales [3][12] - Sales in Europe increased year-over-year and sequentially, with clear signs of recovery noted [13] - The Americas also saw sales growth for the second consecutive quarter, led by aerospace and defense [14] Demand and Supply Chain Dynamics - Demand signals are resetting higher, particularly driven by data center and AI demand, with lead times trending upward across most product categories [9][10] - The pricing environment remained stable, although spot price increases were noted in some areas, indicating potential upward pricing pressure as supply tightens [11] Working Capital and Inventory Management - Working capital improved with inventory reduced by $126 million, resulting in 86 days of inventory at quarter-end [6][18] - The company aims to reduce total inventory days to below 80 [18] Guidance and Outlook - For Q3 fiscal 2026, sales are guided to be between $6.2 billion and $6.5 billion, with diluted EPS expected to be between $1.20 and $1.30, implying modest sequential growth [20][21] - The guidance reflects anticipated growth in the Americas and EMEA, with a slight seasonal decline in Asia due to the Lunar New Year [21]

Financial Data and Key Metrics Changes - The company achieved sales of $6.3 billion in the second quarter, representing a 12% year-over-year increase and a 7% sequential increase [13][4] - Adjusted diluted earnings per share were $1.05, exceeding the high end of guidance and growing nearly four times compared to the previous quarter [16][21] - Operating margin for electronic components was 3.2%, while Farnell's operating margin was 4.7%, marking the highest for Farnell since fiscal 2023 [16][11] Business Line Data and Key Metrics Changes - Electronic components sales increased by 11% year-over-year and 7% sequentially, with a constant currency increase of 9% year-over-year [13][14] - Farnell sales grew by 24% year-over-year and 7% sequentially, with a constant currency increase of 20% year-over-year [14][10] - Demand creation revenues increased sequentially by 7%, indicating positive trends in converting design wins into revenues [9] Market Data and Key Metrics Changes - Sales in Asia reached a record high of over $3 billion, marking the sixth consecutive quarter of year-on-year sales growth in the region [8][13] - Year-over-year sales increased by 17% in Asia, 8% in Europe, and 5% in the Americas [13] - The pricing environment remained stable, but upward pricing pressure is anticipated across many technologies due to supply dynamics [7][34] Company Strategy and Development Direction - The company is focused on expanding operating margins, optimizing inventory, and generating cash flow while making necessary investments for future growth [5][12] - There is an emphasis on improving return on working capital and overall return on invested capital [20][19] - The company aims to leverage its diverse supplier line card and customer base to drive profitable growth [11][12] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the future, citing strong demand signals and improving visibility into customer orders [6][29] - The company anticipates continued growth and margin expansion in 2026, supported by a recovering market and improved operational leverage [12][21] - Management noted that the demand for electronic components is broadening, driven by sectors such as data centers and artificial intelligence [5][6] Other Important Information - The company generated $208 million in cash flow from operations during the quarter and reduced inventory by $126 million [20][17] - The company paid a quarterly dividend of $0.35 per share, totaling $28 million [21] - Guidance for the third quarter of fiscal 2026 includes sales in the range of $6.2 billion to $6.5 billion and diluted earnings per share between $1.20 and $1.30 [21] Q&A Session Summary Question: Can you discuss the linearity of orders during the quarter and the duration of your backlog? - Management noted that bookings typically tail off in December, but billings continue, indicating a positive trend in order visibility and customer engagement [25][26][29] Question: What are the pricing pressures in specific end markets? - Management indicated that while pricing has remained stable, there are signs of upward pressure in memory, storage, and certain capacitors, driven by increased demand from data centers [34][49] Question: How do you expect the March quarter to perform relative to seasonality? - Management expects a typical seasonal bounce back in the West, with high single-digit growth anticipated, while Asia may see a less than seasonal decline due to Lunar New Year [38][45] Question: Can core business margins grow year-over-year for the remaining quarters? - Management expressed confidence in margin expansion as the West recovers, with expectations for continued momentum in operating margins [45][46] Question: How does pricing from suppliers impact revenues and margins? - Management explained that pricing affects average selling prices, with contracted customers absorbing price increases, while spot buys can lead to improved margins [48][49]

Financial Data and Key Metrics Changes - The company achieved sales of $6.3 billion in the second quarter, representing a 12% year-over-year increase and a 7% sequential increase [13][4] - Operating margin for the electronic components business was 3.2%, while Farnell's operating margin was 4.7% [4][16] - Adjusted diluted earnings per share reached $1.05, exceeding the high end of guidance and growing nearly four times compared to the previous quarter [16][21] - Gross margin was stable at 10.5%, with electronic component gross margins impacted by faster growth in Asia compared to the West [14][16] Business Line Data and Key Metrics Changes - Electronic components sales increased by 11% year-over-year and 7% sequentially, with Farnell sales growing 24% year-over-year and 7% sequentially [13][14] - Demand creation revenues increased sequentially by 7%, indicating a positive trend in converting design wins into revenues [9] - The IP&E business experienced double-digit growth year-over-year, contributing to higher gross margins [10] Market Data and Key Metrics Changes - Sales in Asia reached a record high of over $3 billion, marking the sixth consecutive quarter of year-over-year growth in the region [8] - Year-over-year sales growth was 17% in Asia, 8% in Europe, and 5% in the Americas [13] - The pricing environment remained stable, but upward pricing pressure is anticipated across many technologies due to supply dynamics [7] Company Strategy and Development Direction - The company is focused on expanding operating margins, optimizing inventory, and generating cash flow while investing in future growth [5][12] - There is an emphasis on improving return on working capital and maintaining a strong balance sheet by reducing leverage [20] - The company aims to leverage its diverse supplier line card and customer base to enhance its market position [11] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the future, citing strong demand signals and improving visibility from customers [29][45] - The company anticipates continued growth and margin expansion in 2026, supported by a recovery in the West and improved demand in Asia [12][22] - Management noted that the current operating environment presents opportunities to address supply chain complexities [7] Other Important Information - The company generated $208 million in cash flow from operations during the quarter and reduced inventory by $126 million [20][17] - The third quarter guidance projects sales between $6.2 billion and $6.5 billion, with expectations for growth in the Americas and EMEA [21] Q&A Session Summary Question: Can you discuss the linearity of orders during the quarter? - Management noted that bookings typically tail off in December, but billings continue, indicating a positive book-to-bill ratio [25][26] Question: What are the pricing pressures in specific end markets? - Management indicated that pricing pressures are emerging in memory, storage, and certain capacitors, driven by demand from data centers and industrial customers [33][34] Question: How does the company view operating margin growth for the remaining quarters? - Management expects continued momentum in operating margins, particularly as the West recovers, with a focus on improving profitability [45][46]

Financial Data and Key Metrics Changes - The company achieved sales of $6.3 billion in Q2 2026, representing a 12% year-over-year increase and a 7% sequential increase [12] - Adjusted diluted earnings per share reached $1.05, exceeding the high end of guidance and growing nearly four times compared to the previous quarter [15] - Gross margin for the quarter was 10.5%, remaining stable year-over-year and slightly up sequentially [13] Business Line Data and Key Metrics Changes - Electronic components sales increased by 11% year-over-year and 7% sequentially, with constant currency sales up 9% year-over-year [12] - Farnell sales grew 24% year-over-year and 7% sequentially, with constant currency sales up 20% year-over-year [12] - Operating margin for electronic components was 3.2%, while Farnell's operating margin was 4.7%, marking the highest for Farnell since fiscal 2023 [15] Market Data and Key Metrics Changes - Sales in Asia increased by 17% year-over-year, accounting for over 50% of total sales, compared to approximately 48% in the previous quarter [12] - EMEA sales grew 8% year-over-year, showing signs of recovery across most end markets [12] - The Americas saw a 5% year-over-year sales increase, with aerospace and defense leading the growth [12] Company Strategy and Development Direction - The company is focused on expanding operating margins, optimizing inventory, and generating cash flow while investing in future growth [4] - There is an emphasis on demand creation, supply chain services, and embedded solutions to drive growth and margin expansion [8] - The company aims to improve return on working capital and overall return on invested capital [18] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the future, citing a diverse supplier line card and a stable leadership team [10] - Demand signals are improving globally, with lead times trending higher across most product categories, driven by data center and AI demand [5] - The company anticipates continued growth and margin expansion in 2026, supported by a favorable regional mix and improving market conditions [21] Other Important Information - The company generated $208 million in cash flow from operations during the quarter and reduced inventory by $126 million [18] - Working capital days decreased to 88 days, indicating improved efficiency [16] - The company paid a quarterly dividend of $0.35 per share, totaling $28 million [19] Q&A Session Summary Question: Can you discuss the linearity of orders during the quarter and the duration of the backlog? - Management noted that bookings typically tail off in December, but billings continued strongly, with positive book-to-bill ratios [24][25] - There is an increasing trend of customers placing orders within lead times, indicating improved visibility [26] Question: What are the pricing pressures in specific end markets? - Management indicated that pricing pressures are emerging in memory, storage, and certain capacitors, driven by increased demand from data centers [32][33] Question: How does the guidance for the March quarter compare to previous years? - Management expects typical seasonality with growth in the West, while Asia may see a less significant decline due to Lunar New Year [35][36] Question: Will core business margins grow year-over-year for the remaining quarters? - Management anticipates continued momentum in operating margins, especially as the West recovers [44][45] Question: How do supplier price increases impact revenues and margins? - Price increases affect average selling prices, with contracted customers absorbing costs, while spot buys can lead to higher margins [47][48] Question: Can Farnell margins accelerate with the recovery in Europe? - Management expects incremental improvements in Farnell margins, potentially exceeding 50-100 basis points as revenues increase [50][51]

Core Insights - Avnet reported revenue of $6.32 billion for the quarter ended December 2025, reflecting an 11.6% increase year-over-year and a surprise of +5.28% over the Zacks Consensus Estimate of $6 billion [1] - Earnings per share (EPS) for the quarter was $1.05, up from $0.87 in the same quarter last year, with an EPS surprise of +10.53% compared to the consensus estimate of $0.95 [1] Financial Performance Metrics - Sales from Farnell reached $427.1 million, exceeding the three-analyst average estimate of $407.69 million, marking a year-over-year increase of +23.6% [4] - Sales from Electronic Components were reported at $5.89 billion, surpassing the average estimate of $5.59 billion, with a year-over-year change of +10.8% [4] - Operating income for Electronic Components was $187.1 million, compared to the average estimate of $171.1 million [4] - Operating income for Farnell was $20 million, exceeding the average estimate of $15.96 million [4] - Corporate expenses reported an operating loss of $35.3 million, worse than the average estimate of $-26.12 million [4] Stock Performance - Avnet's shares have returned +7.6% over the past month, outperforming the Zacks S&P 500 composite's +0.8% change [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating expected performance in line with the broader market in the near term [3]

Avnet Second Quarter Fiscal Year 2026 Financial Results January 28, 2026 Safe Harbor Statement Regional demand • Growth in Asia, the Americas and EMEA Y/Y End market demand 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 fo ...