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Avnet (AVT) Surpasses Q2 Earnings and Revenue Estimates
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Avnet (AVT - Free Report) delivered second-quarter fiscal 2021 non-GAAP earnings of 48 cents per share, surpassing the Zacks Consensus Estimate by 26.32%. The reported figure increased 20% year over year.
Revenues of $4.7 billion also outpaced the Zacks Consensus Estimate by 10.84% and grew 16% year over year.
Robust sales in Asia boosted revenues during the quarter and more than offset the weakness in the Americas and Europe, Middle East, and Africa (EMEA).
Electronic Components segment revenues rose 3.3% year over year to $4.34 billion on strong growth across all regions.
The Farnell segment’s revenues of $325.8 million decreased 1.6% year over year.
Revenues from the Americas declined 7.2% year over year and 5.6% in the EMEA region. Nonetheless, Asia revenues increased 15.5% year over year.
Avnet reported gross profit of $511.25 million, down 2.7% year over year. Gross margin contracted 64 basis points (bps) to 10.9%.
Adjusted operating income was $79.6 million, declining 3.2% year over year. Adjusted operating margin came in at 1.7%, down 11 bps.
Adjusted operating expenses reduced 4.3% year over year to $431.7 million. Per management, Avnet’s $75-million cost-cutting plan announced during fourth-quarter fiscal 2020 is on track and was fully implemented during the quarter. Under this plan, the company aims to reduce net operating expenses by $75 million annually, and improve operating income and returns on capital.
Balance Sheet and Cash Flow
As of Jan 2, 2021, Avnet had cash and cash equivalents of $376.3 million compared with $483 million recorded at the end of the previous quarter.
Long-term debt was $895.6 million as of Jan 2, down from $1.2 billion reported in the prior quarter.
Net debt leverage ratio was 2.1 at the end of the reported quarter. Operating cash flow was $85 million in second-quarter fiscal 2021. Avnet returned $21 million to its shareholders in the form of dividends in the reported quarter.
Third-Quarter Fiscal 2021 Guidance
Avnet estimates fiscal third-quarter revenues in the range of $4.3-$4.7 billion. Non-GAAP earnings for the current quarter are anticipated in the range of 52-58 cents per share.
The long-term earnings growth rate for Shopify, Micron and NetApp is currently pegged at 32.5%, 12.7% and 11.9%, respectively.
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Avnet (AVT) Surpasses Q2 Earnings and Revenue Estimates
Avnet (AVT - Free Report) delivered second-quarter fiscal 2021 non-GAAP earnings of 48 cents per share, surpassing the Zacks Consensus Estimate by 26.32%. The reported figure increased 20% year over year.
Revenues of $4.7 billion also outpaced the Zacks Consensus Estimate by 10.84% and grew 16% year over year.
Robust sales in Asia boosted revenues during the quarter and more than offset the weakness in the Americas and Europe, Middle East, and Africa (EMEA).
Avnet, Inc. Price, Consensus and EPS Surprise
Avnet, Inc. price-consensus-eps-surprise-chart | Avnet, Inc. Quote
Quarter in Detail
Electronic Components segment revenues rose 3.3% year over year to $4.34 billion on strong growth across all regions.
The Farnell segment’s revenues of $325.8 million decreased 1.6% year over year.
Revenues from the Americas declined 7.2% year over year and 5.6% in the EMEA region. Nonetheless, Asia revenues increased 15.5% year over year.
Avnet reported gross profit of $511.25 million, down 2.7% year over year. Gross margin contracted 64 basis points (bps) to 10.9%.
Adjusted operating income was $79.6 million, declining 3.2% year over year. Adjusted operating margin came in at 1.7%, down 11 bps.
Adjusted operating expenses reduced 4.3% year over year to $431.7 million. Per management, Avnet’s $75-million cost-cutting plan announced during fourth-quarter fiscal 2020 is on track and was fully implemented during the quarter. Under this plan, the company aims to reduce net operating expenses by $75 million annually, and improve operating income and returns on capital.
Balance Sheet and Cash Flow
As of Jan 2, 2021, Avnet had cash and cash equivalents of $376.3 million compared with $483 million recorded at the end of the previous quarter.
Long-term debt was $895.6 million as of Jan 2, down from $1.2 billion reported in the prior quarter.
Net debt leverage ratio was 2.1 at the end of the reported quarter. Operating cash flow was $85 million in second-quarter fiscal 2021. Avnet returned $21 million to its shareholders in the form of dividends in the reported quarter.
Third-Quarter Fiscal 2021 Guidance
Avnet estimates fiscal third-quarter revenues in the range of $4.3-$4.7 billion. Non-GAAP earnings for the current quarter are anticipated in the range of 52-58 cents per share.
Zacks Rank and Stocks to Consider
Avnet currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the broader technology sector include Shopify (SHOP - Free Report) , Micron (MU - Free Report) and NetApp (NTAP - Free Report) , all flaunting a Zacks Rank #1 (Strong Buy), at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
The long-term earnings growth rate for Shopify, Micron and NetApp is currently pegged at 32.5%, 12.7% and 11.9%, respectively.
Looking for Stocks with Skyrocketing Upside?
Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.
Ignited by referendums and legislation, this industry is expected to blast from an already robust $17.7 billion in 2019 to a staggering $73.6 billion by 2027. Early investors stand to make a killing, but you have to be ready to act and know just where to look.
See the pot stocks we're targeting >>