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Avnet Q1 Earnings Beat Estimates on Record Sales & Strong Demand
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Key Takeaways
AVT's Q1 EPS surged 332.1% to $3.63, beating estimates by 26.92%, while revenues jumped 81.7% to $10.72B.
Avnet's Electronic Components sales surged 84.3%, while Farnell revenues rose 46.2% on broad-based demand.
AVT expects Q2 revenues of $11.1-$11.4B and adjusted EPS of $3.90-$4.10, signaling continued growth.
Avnet, Inc. (AVT - Free Report) reported first-quarter fiscal 2027 adjusted earnings of $3.63 per share, beating the Zacks Consensus Estimate of $2.86 by 26.92%. The bottom line surged 332.1% year over year.
Revenues jumped 81.7% year over year to a record $10.72 billion and surpassed the consensus mark of $9.15 billion by 17.1%. Broad-based demand across regions, strength in data center, aerospace and defense, and networking markets, and higher memory pricing supported growth. Book-to-bill ratios remained well above parity across all regions.
AVT Posts Record Sales Across Operating Groups
Electronic Components revenues surged 84.3% year over year and 30% sequentially to a record $10.13 billion. Excluding the additional week in the quarter, revenues increased 73.1% year over year. Growth was supported by stronger demand across all regions and end markets, particularly data center, aerospace and defense, and networking.
Farnell revenues climbed 46.2% year over year and 16.6% sequentially to a record $583.3 million. Improving demand across regions and increased sales of higher-margin on-the-board components supported performance. Management highlighted benefits from integrating Farnell's digital distribution capabilities with Avnet's broader customer and supplier relationships.
Americas revenues more than doubled year over year, increasing 108.9% to $2.86 billion. Sequential growth was 38.9%, supported by strong demand in data center, aerospace and defense, and networking. Avnet Integrated Solutions contributed to regional growth, benefiting from increased investment in AI infrastructure and hyperscale data centers.
EMEA revenues climbed 64.3% year over year and 19.1% sequentially to $2.74 billion, reflecting improving industrial and transportation demand. Asia revenues increased 78.8% to $5.12 billion, representing approximately 48% of total sales. Demand in Asia was particularly strong across data center and industrial applications.
AVT Expands Operating Margins on Higher Sales
Gross margin contracted approximately 40 basis points year over year and sequentially to 10%, primarily reflecting product and customer mix. Selling, general and administrative expenses increased $112 million year over year to $576 million. However, these expenses declined as a percentage of gross profit to 53.7% from 75.6% a year ago.
Adjusted operating income surged 230.5% year over year and 56.7% sequentially to $498.1 million. Adjusted operating margin expanded 210 basis points year over year and 82 basis points sequentially to 4.7%. The improvement reflected operating leverage from higher sales and disciplined expense management.
Avnet's Segment Profitability Accelerates
Electronic Components operating income climbed to $484.5 million from $159 million a year ago. Operating margin expanded 189 basis points year over year and 71 basis points sequentially to 4.8%. Improvements across regions, particularly the Americas, supported profitability despite lower gross margins associated with Integrated Solutions.
Farnell operating income increased to $58.6 million from $17.1 million in the year-ago quarter. Operating margin expanded 576 basis points year over year to 10.1%, reaching its highest level in more than three years. Management expects Electronic Components' margin to reach 5% in the second half of fiscal 2027 and anticipates improvement in Farnell's profitability.
AVT Benefits From Pricing and Tighter Supply
Higher memory pricing accounted for approximately one-third of both sequential and year-over-year revenue growth. Management noted that pricing increases had not meaningfully extended beyond memory during the quarter, although additional increases across electronic component categories are expected in the new calendar year.
Lead times continued to extend across semiconductors and interconnect, passive and electromechanical products. Backlog remained healthy and increased during the quarter. Management attributed improving demand to broader market recovery rather than inventory replenishment alone, citing strength across geographies and end markets.
Avnet Invests in Working Capital to Support Growth
Inventories increased approximately $2.11 billion sequentially to $8.18 billion. Inventory days remained relatively stable at 72, while working capital days declined five days sequentially to 64. Return on working capital improved to 25.2% from 19.2% in the preceding quarter.
Operating activities used $842.4 million in cash as the company invested in inventories and receivables to support growth. Gross leverage declined to 3.1X from 3.2X sequentially. Avnet ended the quarter with $236.8 million in cash and $1.2 billion of available committed borrowing capacity.
AVT Issues Strong Second-Quarter Fiscal 2027 Outlook
For the second quarter of fiscal 2027, Avnet expects revenues between $11.1 billion and $11.4 billion. The midpoint of $11.25 billion implies approximately 5% sequential growth, or 12% after adjusting for the additional week in the first quarter.
Adjusted earnings are projected between $3.90 and $4.10 per share. The outlook assumes similar component availability and interest expenses, an adjusted effective tax rate of 21-25% and approximately 87 million shares outstanding.
Advanced Energy Industries shares have gained 1.5% year to date (YTD). The Zacks Consensus Estimate for Advanced Energy Industries’ 2026 earnings indicates a year-over-year increase of 75%. Estimates have remained unchanged for the past 30 days.
Shares of AMETEK have jumped 15.5% YTD. The Zacks Consensus Estimate for AMETEK’s 2026 earnings suggests a year-over-year rise of 13.2%. Estimates have been revised upward in the past 30 days.
ASE Technology shares have surged 132.8% YTD. The Zacks Consensus Estimate for ASE Technology’s 2026 earnings calls for year-over-year growth of 129.8%. Estimates have been revised upward in the past seven days.
View the Zacks #1 Rank List
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Avnet Q1 Earnings Beat Estimates on Record Sales & Strong Demand
Key Takeaways
Avnet, Inc. (AVT - Free Report) reported first-quarter fiscal 2027 adjusted earnings of $3.63 per share, beating the Zacks Consensus Estimate of $2.86 by 26.92%. The bottom line surged 332.1% year over year.
Revenues jumped 81.7% year over year to a record $10.72 billion and surpassed the consensus mark of $9.15 billion by 17.1%. Broad-based demand across regions, strength in data center, aerospace and defense, and networking markets, and higher memory pricing supported growth. Book-to-bill ratios remained well above parity across all regions.
AVT Posts Record Sales Across Operating Groups
Electronic Components revenues surged 84.3% year over year and 30% sequentially to a record $10.13 billion. Excluding the additional week in the quarter, revenues increased 73.1% year over year. Growth was supported by stronger demand across all regions and end markets, particularly data center, aerospace and defense, and networking.
Farnell revenues climbed 46.2% year over year and 16.6% sequentially to a record $583.3 million. Improving demand across regions and increased sales of higher-margin on-the-board components supported performance. Management highlighted benefits from integrating Farnell's digital distribution capabilities with Avnet's broader customer and supplier relationships.
Avnet, Inc. Price, Consensus and EPS Surprise
Avnet, Inc. price-consensus-eps-surprise-chart | Avnet, Inc. Quote
Avnet Sees Robust Growth Across Regions
Americas revenues more than doubled year over year, increasing 108.9% to $2.86 billion. Sequential growth was 38.9%, supported by strong demand in data center, aerospace and defense, and networking. Avnet Integrated Solutions contributed to regional growth, benefiting from increased investment in AI infrastructure and hyperscale data centers.
EMEA revenues climbed 64.3% year over year and 19.1% sequentially to $2.74 billion, reflecting improving industrial and transportation demand. Asia revenues increased 78.8% to $5.12 billion, representing approximately 48% of total sales. Demand in Asia was particularly strong across data center and industrial applications.
AVT Expands Operating Margins on Higher Sales
Gross margin contracted approximately 40 basis points year over year and sequentially to 10%, primarily reflecting product and customer mix. Selling, general and administrative expenses increased $112 million year over year to $576 million. However, these expenses declined as a percentage of gross profit to 53.7% from 75.6% a year ago.
Adjusted operating income surged 230.5% year over year and 56.7% sequentially to $498.1 million. Adjusted operating margin expanded 210 basis points year over year and 82 basis points sequentially to 4.7%. The improvement reflected operating leverage from higher sales and disciplined expense management.
Avnet's Segment Profitability Accelerates
Electronic Components operating income climbed to $484.5 million from $159 million a year ago. Operating margin expanded 189 basis points year over year and 71 basis points sequentially to 4.8%. Improvements across regions, particularly the Americas, supported profitability despite lower gross margins associated with Integrated Solutions.
Farnell operating income increased to $58.6 million from $17.1 million in the year-ago quarter. Operating margin expanded 576 basis points year over year to 10.1%, reaching its highest level in more than three years. Management expects Electronic Components' margin to reach 5% in the second half of fiscal 2027 and anticipates improvement in Farnell's profitability.
AVT Benefits From Pricing and Tighter Supply
Higher memory pricing accounted for approximately one-third of both sequential and year-over-year revenue growth. Management noted that pricing increases had not meaningfully extended beyond memory during the quarter, although additional increases across electronic component categories are expected in the new calendar year.
Lead times continued to extend across semiconductors and interconnect, passive and electromechanical products. Backlog remained healthy and increased during the quarter. Management attributed improving demand to broader market recovery rather than inventory replenishment alone, citing strength across geographies and end markets.
Avnet Invests in Working Capital to Support Growth
Inventories increased approximately $2.11 billion sequentially to $8.18 billion. Inventory days remained relatively stable at 72, while working capital days declined five days sequentially to 64. Return on working capital improved to 25.2% from 19.2% in the preceding quarter.
Operating activities used $842.4 million in cash as the company invested in inventories and receivables to support growth. Gross leverage declined to 3.1X from 3.2X sequentially. Avnet ended the quarter with $236.8 million in cash and $1.2 billion of available committed borrowing capacity.
AVT Issues Strong Second-Quarter Fiscal 2027 Outlook
For the second quarter of fiscal 2027, Avnet expects revenues between $11.1 billion and $11.4 billion. The midpoint of $11.25 billion implies approximately 5% sequential growth, or 12% after adjusting for the additional week in the first quarter.
Adjusted earnings are projected between $3.90 and $4.10 per share. The outlook assumes similar component availability and interest expenses, an adjusted effective tax rate of 21-25% and approximately 87 million shares outstanding.
AVT’s Zacks Rank & Stocks to Consider
Avnet currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks from the broader Zacks Computer and Technology sector include Advanced Energy Industries (AEIS - Free Report) , AMETEK (AME - Free Report) and ASE Technology (ASX - Free Report) . Advanced Energy Industries, AMETEK and ASE Technology sport a Zacks Rank #1 (Strong Buy) each at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Advanced Energy Industries shares have gained 1.5% year to date (YTD). The Zacks Consensus Estimate for Advanced Energy Industries’ 2026 earnings indicates a year-over-year increase of 75%. Estimates have remained unchanged for the past 30 days.
Shares of AMETEK have jumped 15.5% YTD. The Zacks Consensus Estimate for AMETEK’s 2026 earnings suggests a year-over-year rise of 13.2%. Estimates have been revised upward in the past 30 days.
ASE Technology shares have surged 132.8% YTD. The Zacks Consensus Estimate for ASE Technology’s 2026 earnings calls for year-over-year growth of 129.8%. Estimates have been revised upward in the past seven days.