Core Viewpoint - Avnet's recent earnings report indicates a mixed performance, with revenues surpassing estimates but earnings falling short, reflecting challenging market conditions and a downward trend in estimates leading into the next quarter [2][3][11]. Financial Performance - Avnet reported non-GAAP earnings of 87 cents per share for Q2 fiscal 2025, missing the Zacks Consensus Estimate by 1.14% and declining 38% year over year [2]. - Revenues for the second quarter reached $5.7 billion, exceeding the consensus mark by 2.01% and aligning with management's guidance, but down 9% year over year [3]. - The Electronic Components segment generated revenues of $5.32 billion, down 8.5% year over year but up 1.2% sequentially [4]. - Farnell sales decreased by 12% year over year to $345.6 million [4]. Regional Performance - Year-over-year sales increased by 8.4% in Asia to $2.71 billion, while EMEA sales fell by 25.1% to $1.58 billion and Americas sales declined by 13.8% to $1.37 billion [5]. Operating Income and Margins - Adjusted operating income was $159.5 million, down 34.2% year over year, with the Electronic Components segment's operating income declining 27% to $182 million [5][6]. - The adjusted operating margin shrank to 2.8%, a decrease of 110 basis points from the previous year [6]. Balance Sheet and Cash Flow - As of December 28, 2024, Avnet had cash and cash equivalents of $172.1 million, down from $267.5 million at the end of September 2024 [7]. - Long-term debt increased to $2.57 billion from $2.43 billion in the previous quarter [7]. - The company generated $338 million in cash from operational activities during the fiscal second quarter [7]. Shareholder Returns - Avnet repurchased approximately $51 million worth of shares, representing 1.1% of shares outstanding, and returned $29 million to shareholders in dividends [8]. Future Guidance - For Q3 fiscal 2025, Avnet anticipates revenues between $5.05 billion and $5.35 billion, indicating a sequential decline of 6% to 11% [9]. - Expected non-GAAP earnings for the next quarter are projected to be between 65 and 75 cents per share [10]. Estimate Trends - There has been a downward trend in estimates, with the consensus estimate shifting down by 34.17% over the past month [11]. VGM Scores - Avnet has an average Growth Score of C, a Momentum Score of F, and a Value Score of A, placing it in the top 20% for the value investment strategy [12]. Overall Outlook - Estimates for Avnet are trending downward, and the company holds a Zacks Rank of 3 (Hold), suggesting an expectation of in-line returns in the coming months [13].

Core Insights - Avnet's international revenue performance is crucial for assessing its financial resilience and growth prospects [1][2][3] Group 1: Revenue Performance - The total revenue for Avnet in the quarter was $5.66 billion, reflecting an 8.7% decline year over year [4] - Asia contributed $2.71 billion, accounting for 47.88% of total revenue, surpassing the consensus estimate of $2.32 billion by 17.11% [5] - EMEA generated $1.58 billion, representing 27.95% of total revenue, which was below the expected $1.87 billion by 15.31% [6] Group 2: Future Revenue Forecasts - Analysts project total revenue of $5.38 billion for the current fiscal quarter, indicating a 4.9% decline from the previous year [7] - For the full year, total revenue is expected to be $22.17 billion, a decrease of 6.7% compared to last year, with Asia and EMEA projected to contribute 43.9% ($9.73 billion) and 32.9% ($7.3 billion) respectively [8] Group 3: Market Dynamics - Avnet's reliance on international markets presents both opportunities and challenges, making it essential to monitor international revenue trends for future projections [9] - The complexities of global interdependence and geopolitical issues are critical factors influencing earnings forecasts for companies with international operations [10]

Group 1 - The previous investment thought on Avnet (NASDAQ: AVT) was a hold rating due to uncertainty about when the business would emerge from the downcycle [1] - The investment approach focuses on long-term investments while incorporating short-term shorts to uncover alpha opportunities [1] - The analysis is based on bottom-up evaluation, emphasizing the fundamental strengths and weaknesses of individual companies [1] Group 2 - The investment duration is medium to long-term, aiming to identify companies with solid fundamentals, sustainable competitive advantages, and growth potential [1]

Financial Performance - Sales for Q2 2025 were $5.66 billion, a decrease of $541.5 million or 8.7% compared to Q2 2024 sales of $6.20 billion[80] - Gross profit for Q2 2025 was $596 million, down $110 million or 15.6% from Q2 2024[83] - Operating income for Q2 2025 was $155 million, a decline of $81 million or 34.3% compared to $236 million in Q2 2024[76] - Adjusted operating income for Q2 2025 was $159 million, down $83 million or 34.2% from $242 million in Q2 2024[76] - Net income for Q2 2025 was $87 million, a decrease of $31 million or 26.0% compared to $118 million in Q2 2024[76] - Operating income for the second quarter of fiscal 2025 was $155.3 million, a decrease of $80.9 million or 34.3% year over year, with an operating income margin of 2.7%[94] - Adjusted operating income for the first six months of fiscal 2025 was $328.4 million, a decrease of $175.5 million or 34.8% from the prior year[96] - Net income for the second quarter of fiscal 2025 was $87.3 million, or $0.99 per share on a diluted basis, compared to $117.9 million, or $1.28 per share in the same quarter of fiscal 2024[103] Expenses and Costs - SG&A expenses for Q2 2025 were $437 million, a decrease of $28 million or 6.0% from Q2 2024[86] - The Company incurred restructuring, integration, and other expense costs of $30.1 million in the first six months of fiscal 2025, with an after-tax impact of $22.3 million or $0.25 per share on a diluted basis[92] Taxation - The effective tax rate for Q2 2025 was 3.4%, significantly lower than 23.2% in Q2 2024[76] - Income tax expenses for the first six months of fiscal 2025 were $18.8 million, reflecting an effective tax rate of 11.4%, down from 23.7% in the prior year[102] Future Projections - The Company expects sales in Q3 2025 to decline by 6% to 11% compared to Q2 2025[74] Cash Flow and Debt - Net cash provided by operating activities was $444.2 million for the first six months of fiscal 2025, a significant increase of $527.7 million compared to the prior year[106] - The Company had net repayments of debt totaling $307.7 million during the first six months of fiscal 2025, compared to $362.1 million of net borrowing in the same period of the prior year[107] - The Company held cash and cash equivalents of $172.1 million as of December 28, 2024, down from $310.9 million as of June 29, 2024[113] - The Company repurchased $152.2 million of common stock under the share repurchase plan during the first six months of fiscal 2025, compared to $86.0 million in the same period of the prior year[107] Sales Breakdown - EC sales for Q2 2025 were $5.32 billion, down $494.3 million or 8.5% from Q2 2024[81] - Farnell sales for Q2 2025 were $345.6 million, reflecting a decrease of $47.2 million or 12.0% compared to the same period in the prior year[82] Borrowing Capacity - The Company has a combined total borrowing capacity of $2.00 billion under the Credit Facility and the Securitization Program, with approximately $1.09 billion of total committed availability as of December 28, 2024[116]

Core Viewpoint - Avnet (AVT) reported lower-than-expected second-quarter fiscal 2025 results, with non-GAAP earnings of 87 cents per share, missing the Zacks Consensus Estimate by 1.14% and reflecting a 38% year-over-year decline in the bottom line [1] Financial Performance - Revenues for the second quarter reached $5.7 billion, exceeding the consensus mark by 2.01% and aligning with management's guidance of $5.4-$5.7 billion, although this represents a 9% decrease year-over-year due to challenging market conditions, particularly in Europe [3][6] - The Electronic Components segment generated revenues of $5.32 billion, down 8.5% year-over-year but up 1.2% sequentially, while Farnell sales fell 12% year-over-year to $345.6 million [5][6] - Adjusted operating income was $159.5 million, a 34.2% decline year-over-year, with the Electronic Components segment's adjusted operating income down 27% to $182 million and Farnell's down 78% to $3 million [6][7] Margin Analysis - The adjusted operating margin shrank by 110 basis points to 2.8% compared to the previous year, with the Electronic Components segment's margin contracting 85 basis points to 3.4% and Farnell's margin declining 299 basis points to 1% [7] Balance Sheet and Cash Flow - As of December 28, 2024, Avnet had cash and cash equivalents of $172.1 million, down from $267.5 million at the end of September 30, 2024, and long-term debt increased to $2.57 billion from $2.43 billion [9] - The company generated $338 million in cash from operational activities during the fiscal second quarter [9] Future Guidance - For the third quarter of fiscal 2025, Avnet anticipates revenues between $5.05 billion and $5.35 billion, with a midpoint of $5.20 billion, which is below the Zacks Consensus Estimate of $5.59 billion, indicating a potential year-over-year decline of 1.1% [11] - Non-GAAP earnings are expected to be in the range of 65-75 cents per share, compared to the consensus estimate of $1.09, suggesting a year-over-year decline of 0.9% [11][12]

Core Viewpoint - Avnet, Inc. has released its financial results for the second quarter of fiscal year 2025, indicating key performance metrics and insights into the company's operations and market position [3]. Financial Results - The financial results for Q2 fiscal year 2025 are available on Avnet's Investor Relations website, along with a slide presentation for further details [3]. - All results provided in the earnings call will be non-GAAP measures, with a full reconciliation available in the press release [5]. Company Leadership - The conference call featured key participants including Joseph Burke (Vice President, Treasurer & Investor Relations), Philip Gallagher (Chief Executive Officer), and Ken Jacobson (Chief Financial Officer) [1][2]. Conference Call Details - The earnings conference call took place on January 29, 2025, at 11:00 AM ET, providing a platform for discussing the company's performance and future outlook [1].

Avnet Second Quarter Fiscal Year 2025 Financial Results January 29, 2025 Safe Harbor Statement 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," "shou ...

Avnet (AVT) came out with quarterly earnings of $0.87 per share, missing the Zacks Consensus Estimate of $0.88 per share. This compares to earnings of $1.40 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of -1.14%. A quarter ago, it was expected that this distributor of electronic components would post earnings of $0.85 per share when it actually produced earnings of $0.92, delivering a surprise of 8.24%.Over the last four quart ...

Financial Performance - Second quarter sales were $5.7 billion, down 8.7% from $6.2 billion in the prior year quarter[3]. - Diluted earnings per share (EPS) were $0.99, a decrease of 22.7% compared to $1.28 in the prior year quarter[3]. - Adjusted diluted EPS was $0.87, down 37.9% from $1.40 in the prior year quarter[3]. - Operating income margin was 2.7%, compared to 3.8% in the prior year quarter, reflecting a decrease of 107 basis points[3]. - Net income for the six months ended December 28, 2024, was $146,209 thousand, a decrease of 55.3% compared to $327,199 thousand for the same period in 2023[17]. - GAAP diluted earnings per share increased to $1.65 for the six months ended December 28, 2024, compared to $0.66 for the same period in 2023, marking a growth of 150%[24]. - GAAP net income for the fiscal year 2024 is $498,699,000, compared to $209,268,000 in 2023, reflecting a substantial year-over-year growth[25]. Cash Flow and Assets - Generated over $300 million in cash flow from operations, with inventory down $362 million or more than 6% from the prior quarter[3]. - Cash flows provided by operating activities were $444,152 thousand for the six months ended December 28, 2024, compared to a cash outflow of $83,575 thousand in the same period last year[17]. - Cash and cash equivalents decreased by $138,805 thousand during the six months ended December 28, 2024, from $310,941 thousand at the beginning of the period[17]. - Total assets decreased to $11,942,931 thousand as of December 28, 2024, down from $12,209,147 thousand on June 29, 2024, representing a decline of approximately 2.2%[15]. - Total current liabilities decreased to $4,206,060 thousand as of December 28, 2024, down from $4,465,269 thousand on June 29, 2024, a reduction of approximately 5.8%[15]. - Long-term debt increased to $2,567,379 thousand as of December 28, 2024, up from $2,406,629 thousand on June 29, 2024, an increase of approximately 6.7%[15]. Sales and Market Performance - Sales in Asia experienced year-over-year growth for the second consecutive quarter, with a 8.4% increase compared to the prior year[3]. - Sales for Avnet in the second quarter of fiscal 2025 reached $5,663.4 million, a decrease of 10.2% year-over-year[27]. - The Americas region experienced a sales decline of 13.8% year-over-year, while Asia saw an increase of 8.4%[27]. - Electronic Components sales for the fiscal year 2024 totaled $22,160 million, with a quarterly sales figure of $5,187.8 million[29]. Guidance and Projections - Guidance for the third quarter of fiscal 2025 projects sales between $5.05 billion and $5.35 billion, with a midpoint of $5.20 billion[5]. - The guidance implies a sequential sales decline of 6% to 11%, influenced by seasonal factors such as the Lunar New Year[6]. - The adjusted effective tax rate is expected to be between 22% and 26% for the upcoming quarter[7]. - Adjusted diluted earnings per share guidance for the third quarter of fiscal 2025 is projected between $0.65 and $0.75, with GAAP diluted earnings per share guidance ranging from $0.56 to $0.71[31]. Operational Efficiency - The company plans to continue focusing on operational efficiency and cost management to improve profitability in the upcoming quarters[19]. - Adjusted operating income for the year to date December 28, 2024, was $328,430 thousand, compared to $168,944 thousand for the same period in 2023, reflecting a significant increase of 94.5%[24]. - GAAP operating income for the fiscal year 2024 is $844,367,000, compared to $236,257,000 in 2023, showing a significant increase[25]. - Adjusted operating income for the fiscal year 2024 is $900,047,000, up from $261,698,000 in 2023, indicating strong operational performance[25]. Foreign Currency Impact - The company reported a foreign currency loss of $9,887 thousand for the year to date December 28, 2024, compared to a loss of $4,783 thousand in the same period last year[24]. - The company reported a foreign currency gain of $27,730,000 in the fiscal year 2024, contributing positively to the overall income[25]. Restructuring and Expenses - Restructuring, integration, and other expenses for the fiscal year 2024 amounted to $52,550,000, compared to $7,051,000 in 2023[25].

It has been about a month since the last earnings report for Avnet (AVT) . Shares have added about 0% in that time frame, underperforming the S&P 500.Will the recent positive trend continue leading up to its next earnings release, or is Avnet due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts. Avnet's Q1 Earnings and Revenues Beat EstimatesAvnet (AVT) ...