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Avnet Opens Technology Center

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Recently announced, Avnet, Inc. (AVT - Free Report) opened a new technology integration center in Joinville, Brazil. This marked a significant step towards proliferation of its value-added services in Latin America.

This 48,000 square feet technology center has shipping capacity of more than 135,000 technology system platforms in a year along with the ability to provide other advanced solutions such as hardware integration, software configuration, logistics support etc. These technologically superior services are targeted for the wide array of Avnet Embedded and Technology Solutions’ original equipment manufacturers (OEMs) clientele including the vast value-added resellers (VARs) and supply chain partners across Latin America.

Avnet’s decision to develop its own technology center at Brazil shows the company’s commitment and determination to provide seamlessly advanced technology integration services to its customer bases across the globe. With this venture, Avnet now has its self-operated technology centers in North America, South America, Europe and Asia-Pacific.

Benefits of this venture appear to be numerous. Firstly, the center allows for market expansion across the burgeoning economy of Latin America. Secondly, it brings forth avenues of growth for its niche segment, especially Avnet Embedded. Apart from this, Avnet’s resolve to open its own center further bolsters faith in the uniqueness and consistency of services it provides, not to mention the goodwill enhancement the company would enjoy thoroughly across the global economy following this act.

In a separate story, the company announced conflation of Avnet Technology Solutions (TS) with Polycom, Inc. on June 26, 2012 with the intent of providing a range of Polycom RealPresence video and voice solutions through a distribution agreement pertaining to the U.S. and Canada. This distribution agreement shall promote sales in the unified communications (UC) and video collaboration businesses comprehensively, providing technologically advanced and inexpensive solutions to consumers.

During the third fiscal quarter of 2012, Avnet’s TS segment posted an annual decline in revenues of nearly 8% to reach $2.52 billion. We can be hopeful of a better performance from this segment in the company’s last fiscal quarter of 2012 with the current turn of events and the ongoing restructuring activities being implemented by management.

The current Zacks Consensus Estimates for the fourth quarter of fiscal 2012 and for fiscal 2012 are $1.09 per share and $4.17 per share, respectively. The company currently retains a Zacks #3 Rank, which translates into a short-term ‘Hold’ rating. We also have a ‘Neutral’ recommendation on the company’s stock. 

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