) reported an adjusted net income of $83.9 million or 59 cents
per share in the first quarter of fiscal 2013 (ended September
30, 2012) compared to $139.0 million or 90 cents per share in the
year-earlier quarter and an adjusted net income of $145.3 million
or 99 cents per share in the fourth quarter of fiscal 2012.
The earnings surpassed the Zacks Consensus Estimate of 55
cents per share but failed to meet management's guidance range of
78 cents to 88 cents per share for the quarter.
Sales came in at $5.87 billion, down 8.7% year over year and
nearly 7% sequentially. The year-over-year decline was caused by
the company's weak businesses, especially in the Western region.
The revenues in the quarter, however, were within management's
guidance range of $5.80 billion to $6.40 billion but missed the
Zacks Consensus Estimate of $5.89 billion.
On a segmental basis, revenues from Electronics Marketing (EM)
declined 4.3% from the year-ago quarter to $3.65 billion; within
management's guidance range of $3.55 billion - $3.85 billion. The
annual decline was due to the weak industrial end markets.
Revenues from Technology Solutions (TS) fell 15.1% from the
year-ago quarter to $2.21 billion. The segmental revenues were
slightly below management's guidance range of $2.25 billion -
$2.55 billion. Low demand from the EMEA region also continues to
pervasively affect the segment's yields.
Gross margin in the quarter was 11.7%, which remained flat
year over year, but slightly down from 12.0% in the previous
quarter. Excluding restructuring, integration and other charges,
adjusted operating margin was 2.3% versus 3.5% in the year-ago
quarter and 3.7% in the previous quarter. The year-over-year drop
was mainly due to the revenue weakness experienced by the TS
EM operating margin came in at 4.0% compared to 5.0% in the
year-ago quarter and 5.1% in the previous quarter. The lower
gross margin in the Western regions and a geographic mix shift
towards low-margin Asian region adversely impacted the segment's
margin during the quarter.
TS operating margins decreased to 1.6% from 2.5% in the
year-ago quarter and 2.7% in the fourth quarter of fiscal 2012.
The annual decline was mainly due to the fall in the EMEA region
Balance Sheet and Cash flow
Avnet ended the year with cash and cash equivalents of $1.0
billion, which remained flat year over year. As of September 29,
2012, long-term debt was $1.4 billion compared to $1.3 billion at
the end of the previous quarter.
During the quarter, the company generated $81 million of cash
from operating activities. Capital spending in the quarter
amounted to $24.4 million.
The company has repurchased 4.17 million shares at an average
price of $31 during the first quarter of fiscal 2013. Since
August 2011, Avnet has bought-back 15.44 million shares worth
For the second quarter of fiscal 2013, the company projects
consolidated sales in the range of $5.95 billion and $6.65
billion. Avnet projects that EM sales and TS sales will be in the
range of $3.35 billion to $3.65 billion and $2.60 billion and
$3.00 billion, respectively. Adjusted EPS (excluding
restructuring charges, acquisitions charges and post-closing
integration activities) is likely to be within 79 cents to 89
cents per share along with a tax rate of 27% - 31%.
AVNET (AVT): Free Stock Analysis Report
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