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Avnet (AVT) to Report Q3 Earnings: What's in the Cards?

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Avnet, Inc. (AVT - Free Report) is slated to release its third-quarter fiscal 2018 results on Apr 26. Notably, the company beat estimates in each of the trailing four quarters, delivering an average positive earnings surprise of 6.7%. In the last reported quarter, the company came up with a positive earnings surprise of 8.3%.

The Zacks Consensus Estimate for first-quarter earnings is pegged at 96 cents per share, indicating a 9.1% increase on a year-over-year basis. Revenues are estimated to be around $4.8 billion, indicating an 8% increase from the year-ago quarter.

What the Zacks Model Says

According to the Zacks model, a company with a Zacks Rank #1 (Strong Buy), 2 (Buy) or #3 (Hold) has a good chance of beating estimates if it also has a positiveEarnings ESP. The Sell-rated stocks (Zacks Rank #4 or #5) are best avoided.

Avnet has a Zacks Rank #2 and an Earnings ESP of 0.00%. This indicates that a beat is unlikely. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Factors to Consider

Avnet’s restructuring initiatives have proved to be beneficial as evident from the results of the last few quarters. Notably, the divestment of its troubled Technology Solution business and resultant focus on high growth areas such as marketing electronic components and related products in the supply chain aided the company’s financials. These initiatives are expected to positively impact third-quarter results as well.

Additionally, the company’s investments in the Internet of Things (IoT) industry are positives, considering the growth prospects of the same. Avnet has been trying to expand its footprint in the IoT domain over the past year via investments in embedded solutions, IoT and critical digital platforms as well as expansion into greenfield markets.

During the soon-to-be reported quarter, the company announced additions to the series of AT&T (T - Free Report) IoT Starter Kits that have been developed by the duo. In January, the company launched its cloud-based IoT platform & services via Microsoft’s (MSFT - Free Report) Azure.

Additionally, the company’s announcement of a 5.5% increase in its quarterly dividend indicates a strong balance sheet, which is another positive.

Nonetheless, a highly competitive industry coupled with the ongoing changes in the supplier channel might negatively impact the results of the company.

Avnet, Inc. Price and EPS Surprise

Avnet, Inc. Price and EPS Surprise | Avnet, Inc. Quote

Stock to Consider

Here is a company that you may want to consider as our model shows that it has the right combination of elements to post an earnings beat:

Paycom Software, Inc. (PAYC - Free Report) has an Earnings ESP of +0.33% and a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

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