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Avnet (AVT) Q4 Earnings & Sales Beat Estimates, Increase Y/Y

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Avnet Inc. (AVT - Free Report) reported fourth-quarter fiscal 2018 results, wherein the top line and bottom line surpassed the Zacks Consensus Estimate.

The company reported non-GAAP earnings of 99 cents per share, beating the Zacks Consensus Estimate of 97 cents and increasing 18% from the year-ago quarter.

Avnet’s quarterly revenues of $5.06 billion increased 9.8% year over year on a reported basis, and 6.7% in constant currency. The figure topped the Zacks Consensus Estimate of $4.83 billion. Notably, revenues came above the guided range of $4.65-$4.95 billion.

The company generated $19.03 billion revenues during full-fiscal 2018.

Avnet, Inc. Price, Consensus and EPS Surprise

 

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

Quarter Details

The healthy quarterly results were driven by continued strong worldwide demand for the Electronic Components segment, which increased 9.6% year over year to $4.67 billion. Avnet’s commitment to accelerate the Electronic Components business included the replacement of its revenues from supplier program changes that had negatively impacted it in the last fiscal.

Within the Electronic Components group, Avnet Integrated business grew 7% year over year as a result of the company’s dedicated efforts to scale its high-profit businesses. Its end-to-end IoT solutions pipeline also witnessed 59% customer additions sequentially as a result of its initiatives in the space through acquisitions and partnerships.

Premier Farnell segment’s revenues totaled $390.5 million, up 13% year over year.

Geographically, Americas sales improved 0.5% year over year to $1.34 billion. EMEA and Asia sales increased 7.8% and 19.6% to $1.78 billion and $1.94 billion, respectively, from the year-ago quarter.

The company reported a year-over-year increase of 3.7% in gross profit, reaching $658.63 million. However, gross profit margin contracted 70 basis points (bps) to 13%.

Adjusted operating income increased 20.2% from the year-earlier quarter to $186.5 million. Adjusted operating margin came in at 3.7%, up 32 bps.

Avnet added three new supplier lines to its Electronic Component business and four new supplier lines at Premier Farnell.

Additionally, the company recently announced that Microsemi is once again part of the Avnet line card.

Balance Sheet and Cash Flow

Avnet exited the fiscal fourth quarter with cash and cash equivalents of $621.13 million compared with $505.1 million recorded in the previous quarter.

Long-term debt was $1.49 billion. During full-fiscal 2018, the company generated $253.49 million of cash from operational activities.

Avnet paid dividend worth $22.1 million during the quarter. The company repurchased 2.9 million shares worth $117 million during the fiscal fourth quarter.

Guidance

For first-quarter fiscal 2019, the company estimates sales in the range of $4.8-$5.2 billion (mid-point $5 billion).

Non-GAAP earnings per share are estimated in the range of 95 cents to $1.05 (mid-point $1).

Zacks Rank and Other Stocks to Consider

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

A few other stocks worth considering in the broader Computer and Technology sector are Anixter International Inc. , Qualys, Inc. (QLYS - Free Report) and Fortinet, Inc. (FTNT - Free Report) , each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Long-term earnings growth for Anixter, Qualys and Science Applications is projected to be 8%, 8% and 16.75%, respectively.

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