Avnet (AVT Quick QuoteAVT - Free Report) reported better-than-anticipated fourth-quarter fiscal 2022 results and provided impressive guidance for the first quarter of fiscal 2023.

The company’s fiscal fourth-quarter non-GAAP earnings were $2.07 per share, which surpassed the Zacks Consensus Estimate of $1.96. The reported figure jumped a whopping 84.8% year over year.

Revenues climbed 21.9% year over year to $6.37 billion. On a constant-currency basis, fiscal fourth-quarter sales increased 28.2% year over year. The top line beat the Zacks Consensus Estimate of $6.2 billion.

Avnet’s quarterly results benefited from a strong demand environment for its products and the company’s continued investments in e-commerce and expanding customer relationships. Robust sales in the Americas, the EMEA and Asia bolstered revenues in the reported quarter.

Quarter in Detail

The Electronic Components segment’s revenues were up 23.9% year over year to $5.93 billion on stellar growth across all regions.

The Farnell segment’s revenues inched up 0.2% to $442.3 million.

Revenues from America increased 35.5% year over year. Sales from the EMEA and Asia regions jumped 18.8% and 17.2% year over year, respectively.

Avnet reported a gross profit of $779.6 million, up 20.9% year over year. The gross margin contracted 10 basis points (bps) to 12.2%.

The adjusted operating income came in at $287.6 million, soaring 89.4% year over year. The adjusted operating margin came in at 4.5%, up 160 bps.

Balance Sheet and Cash Flow

As of Jul 2, 2022, AVT had cash and cash equivalents of $153.7 million compared with the $199.5 million reported at the end of the previous quarter.

The long-term debt was $1.44 billion as of Jul 2, up from the $922 million reported in the prior quarter. During fiscal 2022, Avnet used cash worth $219.3 million for operational activities.

First-Quarter Fiscal 2023 Guidance

Avnet estimates first-quarter fiscal 2023 revenues in the range of $6.2 billion-$6.5 billion (midpoint $6.35 billion). Non-GAAP earnings for the current quarter are anticipated in the range of $1.85-$1.95 per share (midpoint $1.90).

Zacks Rank & Key Picks

Avnet currently carries a Zacks Rank #4 (Sell). Shares of AVT have increased 12.6% year to date (“YTD”).

Some better-ranked stocks worth considering from the broader technology sector are Cadence Design Systems (CDNS Quick QuoteCDNS - Free Report) , Manhattan Associates (MANH Quick QuoteMANH - Free Report) and Paylocity (PCTY Quick QuotePCTY - Free Report) , each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

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