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Avnet (AVT) Signs Distribution Agreement with Mellanox
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Electronics and IT distributor, Avnet Inc. (AVT - Free Report) is set to distribute networking connectivity solutions related to analytics, big data and storage from Mellanox Technologies in Brazil, Chile, Colombia, Ecuador and Mexico. The financial terms of the deal were kept confidential.
Mellanox Technologies is a leading supplierof end-to-end interconnect solutions for servers and storage systems, with products ranging from switches and routers to security solutions and financial services. The deal with Mellanox will strengthen Avnet’s core business of distributing electronic components.
The agreement will help Avnet to provide its channel partners better solutions for datacenters. It will also enable Avnet to provide independent software vendor (ISV), system integrator (SI), and value-added reseller (VAR) partners with technical expertise, training and development and financial and end-to-end solutions, thus improving Avnet’s revenue stream and possibly its market share.
According to the press release, “With Avnet and Mellanox, our partners will now be able to enhance the performance of their customers’ data centers in new ways. Partners will receive all the necessary training and support for Mellanox through Avnet to help them pursue opportunities in the media/entertainment, petroleum and other industries and deliver efficient networking transmissions through next-generation Ethernet switches.”
The current agreement is expected to place Avnet in a strong position in the enterprise software market compared to its prime competitor Arrow Electronics (ARW - Free Report) .
Bottom Line
We remain optimistic about Avnet's leading position in electronics distribution, continuous cost cutting initiatives and acquisition synergies. The company's acquisitions have been prudent, enabling it to expand its product portfolio and add to its revenue streams.
Despite the company’s strategic initiatives to expand in newer markets, the stock generated a year-to-date return of 6.95% compared with the Zacks Electronic Parts Distributor industry's gain of 26.84%.
The underperformance can be blamed on the company’s last quarter’s unimpressive results, which make us increasingly cautious about its near-term performance. While the bottom line managed to surpass the Zacks Consensus Estimate, the top line fell short of the same. Moreover, both earnings and revenues declined on a year-over-year basis, primarily due to the impact of an extra week of sales in the year-ago quarter and unfavorable exchange rate.
FormFactor has a long-term expected earnings per share growth rate of 12%.
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Avnet (AVT) Signs Distribution Agreement with Mellanox
Electronics and IT distributor, Avnet Inc. (AVT - Free Report) is set to distribute networking connectivity solutions related to analytics, big data and storage from Mellanox Technologies in Brazil, Chile, Colombia, Ecuador and Mexico. The financial terms of the deal were kept confidential.
Mellanox Technologies is a leading supplierof end-to-end interconnect solutions for servers and storage systems, with products ranging from switches and routers to security solutions and financial services. The deal with Mellanox will strengthen Avnet’s core business of distributing electronic components.
The agreement will help Avnet to provide its channel partners better solutions for datacenters. It will also enable Avnet to provide independent software vendor (ISV), system integrator (SI), and value-added reseller (VAR) partners with technical expertise, training and development and financial and end-to-end solutions, thus improving Avnet’s revenue stream and possibly its market share.
According to the press release, “With Avnet and Mellanox, our partners will now be able to enhance the performance of their customers’ data centers in new ways. Partners will receive all the necessary training and support for Mellanox through Avnet to help them pursue opportunities in the media/entertainment, petroleum and other industries and deliver efficient networking transmissions through next-generation Ethernet switches.”
The current agreement is expected to place Avnet in a strong position in the enterprise software market compared to its prime competitor Arrow Electronics (ARW - Free Report) .
Bottom Line
We remain optimistic about Avnet's leading position in electronics distribution, continuous cost cutting initiatives and acquisition synergies. The company's acquisitions have been prudent, enabling it to expand its product portfolio and add to its revenue streams.
Despite the company’s strategic initiatives to expand in newer markets, the stock generated a year-to-date return of 6.95% compared with the Zacks Electronic Parts Distributor industry's gain of 26.84%.
The underperformance can be blamed on the company’s last quarter’s unimpressive results, which make us increasingly cautious about its near-term performance. While the bottom line managed to surpass the Zacks Consensus Estimate, the top line fell short of the same. Moreover, both earnings and revenues declined on a year-over-year basis, primarily due to the impact of an extra week of sales in the year-ago quarter and unfavorable exchange rate.
Currently, Avnet carries a Zacks Rank #4 (Sell).
A better-ranked stock in the technology sector is FormFactor, Inc. (FORM - Free Report) , carrying a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here
FormFactor has a long-term expected earnings per share growth rate of 12%.
Zacks' Top Investment Ideas for Long-Term Profit
How would you like to see our best recommendations to help you find today’s most promising long-term stocks? Starting now, you can look inside our portfolios featuring stocks under $10, income stocks, value investments and more. These picks, which have double and triple-digit profit potential, are rarely available to the public. But you can see them now. Click here >>