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Avnet's (AVT) Q4 Earnings Beat, Revenues Meet Estimates

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Avnet (AVT - Free Report) reported fourth-quarter fiscal 2021 non-GAAP earnings of $1.12 per share, surpassing the Zacks Consensus Estimate by 8.7%. The reported figure also jumped 75% year over year and 51.4%, sequentially.

Revenues jumped 25.7%, year over year, and 6.3%, sequentially, to $5.23 billion. On a constant currency basis, fourth-quarter sales increased 21.5%, year over year, and 6.4%, sequentially. The top-line figure is also in line with the Zacks Consensus Estimate.

Robust sales in Asia and Europe, Middle East, and Africa (EMEA) regions boosted revenues in the reported quarter. Improvement in Americas also served as tailwind.

Avnet, Inc. Price, Consensus and EPS Surprise 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 23.7% year over year to $4.79 billion on strong growth across all regions.

The Farnell segment’s revenues of $441.4 million climbed 51.1% year over year.

Revenues from the Americas increased 3.9% year over year. Sales from the EMEA and Asia regions jumped 29.3% and 37.7%, year over year, respectively.

Avnet reported gross profit of $644.9 million, up 35.8% year over year. Gross margin expanded 90 basis points (bps) to 12.3%.

Adjusted operating income was $151.8 million, soaring 253.7%, year over year. Adjusted operating margin came in at 2.9%, up 187 bps.

Adjusted operating expenses flared up 14.1%, year over year, to $493.1 on elevated costs associated with the company’s sales growth.

Fiscal 2021 Highlights

Avnet reported fiscal 2021 non-GAAP earnings of $2.71 per share, surpassing the Zacks Consensus Estimate by 3.4%. The reported figure also increased 32.8% year over year. Revenues jumped 10.8% year over year to $19.53 billion as well as beat the Zacks Consensus Estimate of $19.51 billion.

Balance Sheet and Cash Flow

As of Jul 3, 2021, Avnet had cash and cash equivalents of $199.7 million compared with the $323 million recorded at the end of the previous quarter.

Long-term debt was $1.19 billion as of Jul 3, up from the $895.9 million reported in the prior quarter.

Net debt leverage ratio was 1.9 at the end of fiscal 2021. It generated operating cash flow of $90.9 million in fiscal 2021. Avnet returned $84.3 million to shareholders in the form of dividends during the fiscal.

Q1 Fiscal 2022 Guidance

Avnet estimates fiscal first-quarter revenues in the range of $5.1-$5.4 billion. Non-GAAP earnings for the current quarter are anticipated in the range of $1.02-$1.12 per share.

Zacks Rank & Other Stocks to Consider

Avnet currently carries a Zacks Rank #2 (Buy).

Some other top-ranked stocks in the broader technology sector include Microsoft (MSFT - Free Report) , Cadence Design Systems (CDNS - Free Report) and Texas Instruments (TXN - Free Report) , all carrying a Zacks Rank of 2, at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

The long-term earnings growth rate for Microsoft, Cadence Design and Texas Instruments is currently pegged at 11.5%, 11.7% and 9.3%, respectively.

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