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October 31, 2011
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Avnet, Inc (AVT) reported a net income of $139.0 million or $0.90 per diluted share in the first quarter of fiscal 2012 compared to a net income of $238.1 million or $1.54 per share in the fourth quarter of fiscal 2011 and a net income of $138.2 million or $0.90 in the year-ago quarter.
The net reported in the quarter missed the Zacks Consensus Estimate by a penny and was at the low-end of management’s guidance range of $0.90 -$0.98.
Quarter in Detail: Sales came in at $6,426.0 million, down 3.9% from a year-ago and down 7.0% sequentially. Pro forma revenue (excluding acquisitions/divestitures) grew 3.6% year over year and roughly flat in constant currency. Revenues were within management’s guidance range of $6.25 billion - $6.85 billion.
On a segmental basis, revenues from Electronics Marketing (EM) increased 5.4% from the year-ago quarter to $3.82 billion, within management’s guidance range of $3.75 billion - $4.05 billion.
Revenues from Technology Solutions (TS) improved 1.9% from the year-ago quarter to $2.61 billion, ahead of management’s guidance range of $2.5 billion - $2.85 billion.
Margins: Gross margin declined to 11.7% from 12.0% in the previous quarter but was flat sequentially. Excluding restructuring, integration and other charges, adjusted operating margin was 3.5% compared to 3.9% in the previous quarter but was flat sequentially.
EM operating margin came in at 5.01% from 5.31% in the year-ago quarter but down from 5.73% in the previous quarter. TS operating margins increased to 2.49% from 2.29% in the previous quarter and 2.21% in the year-ago quarter.
Cash flow/Balance Sheet: During the quarter, Avnet generated net cash of $204 million from operations and used $40.0 million in capital expenditures. Avnet ended the quarter with cash and cash equivalents of $622.4 million, down from $675.3 million at the end of the previous quarter.
In August, Avnet's Board of Directors approved a $500 million share repurchase program. During the quarter, Avnet repurchased 3.45 million shares for an aggregate cost of $90.9 million.
Guidance: For the second quarter of fiscal 2012, the company projects consolidated sales in the range of $6.45 billion and $7.15 billion. Avnet expects EM sales and TS sales to be in the range of $3.45 billion - $3.75 billion and $3.0 billion - $3.40 billion, respectively. Adjusted EPS is expected in the range of $1.01 - $1.09.
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