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Why Is Avnet (AVT) Up 2.3% Since Last Earnings Report?
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It has been about a month since the last earnings report for Avnet (AVT - Free Report) . Shares have added about 2.3% in that time frame, outperforming 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 reported fiscal second-quarter non-GAAP earnings of $1.51 per share, which surpassed the Zacks Consensus Estimate of $1.25. The reported figure also jumped a whopping 215% year over year and 23.8% sequentially.
Revenues climbed 25.6% year over year and 5% sequentially to $5.87 billion. On a constant currency basis, fiscal second-quarter sales increased 27.4% year over year and 6.1% quarter over quarter. The top line also surpassed the Zacks Consensus Estimate of $5.52 billion.
Avnet’s quarterly results benefited from a strong demand environment for its products as well as the company’s continued investments in e-commerce and expanding customer relationships. Robust sales in the EMEA boosted revenues in the reported quarter. An improvement in America also served as a tailwind.
Quarter in Detail
The Electronic Components segment’s revenues were up 24.9% year over year to $5.42 billion on stellar growth across all regions.
The Farnell segment’s revenues of $440.9 million climbed 35.3% year over year.
Revenues from America increased 26.3% year over year. Sales from the EMEA and Asia regions jumped 36.7% and 18.6% year over year, respectively.
Avnet reported gross profit of $713 million, up 39.4% year over year. Gross margin expanded 120 basis points (bps) to 12.2%.
Adjusted operating income came in at $215.5 million, soaring 170.7% year over year. Adjusted operating margin came in at 3.7%, up 197 bps.
Balance Sheet and Cash Flow
As of Jan 1, 2022, Avnet had cash and cash equivalents of $167.8 million compared with $299.1 million recorded at the end of the previous quarter.
Long-term debt was $1.14 billion as of Jan 1, up from $1.39 billion reported in the prior quarter.
The net debt leverage ratio was 1.7 at the end of the fiscal second quarter.
Q2 Fiscal 2022 Guidance
Avnet estimates fiscal third-quarter revenues in the range of $5.4-$5.8 billion (midpoint $5.6 billion). Non-GAAP earnings for the current quarter are anticipated in the range of $1.45-$1.55 per share (midpoint $1.50).
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in estimates revision.
The consensus estimate has shifted 25.1% due to these changes.
VGM Scores
At this time, Avnet has a subpar Growth Score of D, a grade with the same score on the momentum front. Charting a somewhat similar path, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise Avnet has a Zacks Rank #1 (Strong Buy). We expect an above average return from the stock in the next few months.
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Why Is Avnet (AVT) Up 2.3% Since Last Earnings Report?
It has been about a month since the last earnings report for Avnet (AVT - Free Report) . Shares have added about 2.3% in that time frame, outperforming 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 Q2 Earnings and Revenues Beat Estimates
Avnet reported better-than-expected second-quarter fiscal 2022 result.
Avnet reported fiscal second-quarter non-GAAP earnings of $1.51 per share, which surpassed the Zacks Consensus Estimate of $1.25. The reported figure also jumped a whopping 215% year over year and 23.8% sequentially.
Revenues climbed 25.6% year over year and 5% sequentially to $5.87 billion. On a constant currency basis, fiscal second-quarter sales increased 27.4% year over year and 6.1% quarter over quarter. The top line also surpassed the Zacks Consensus Estimate of $5.52 billion.
Avnet’s quarterly results benefited from a strong demand environment for its products as well as the company’s continued investments in e-commerce and expanding customer relationships. Robust sales in the EMEA boosted revenues in the reported quarter. An improvement in America also served as a tailwind.
Quarter in Detail
The Electronic Components segment’s revenues were up 24.9% year over year to $5.42 billion on stellar growth across all regions.
The Farnell segment’s revenues of $440.9 million climbed 35.3% year over year.
Revenues from America increased 26.3% year over year. Sales from the EMEA and Asia regions jumped 36.7% and 18.6% year over year, respectively.
Avnet reported gross profit of $713 million, up 39.4% year over year. Gross margin expanded 120 basis points (bps) to 12.2%.
Adjusted operating income came in at $215.5 million, soaring 170.7% year over year. Adjusted operating margin came in at 3.7%, up 197 bps.
Balance Sheet and Cash Flow
As of Jan 1, 2022, Avnet had cash and cash equivalents of $167.8 million compared with $299.1 million recorded at the end of the previous quarter.
Long-term debt was $1.14 billion as of Jan 1, up from $1.39 billion reported in the prior quarter.
The net debt leverage ratio was 1.7 at the end of the fiscal second quarter.
Q2 Fiscal 2022 Guidance
Avnet estimates fiscal third-quarter revenues in the range of $5.4-$5.8 billion (midpoint $5.6 billion). Non-GAAP earnings for the current quarter are anticipated in the range of $1.45-$1.55 per share (midpoint $1.50).
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in estimates revision.
The consensus estimate has shifted 25.1% due to these changes.
VGM Scores
At this time, Avnet has a subpar Growth Score of D, a grade with the same score on the momentum front. Charting a somewhat similar path, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise Avnet has a Zacks Rank #1 (Strong Buy). We expect an above average return from the stock in the next few months.