In This Article:
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Revenue: $5.7 billion, down 9% year over year, up 1% sequentially.
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Adjusted EPS: $0.87, above the midpoint of guidance.
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Cash Flow from Operations: Over $300 million generated in the quarter.
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Gross Margin: 10.5%, down 86 basis points year over year and 32 basis points sequentially.
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SG&A Expenses: $437 million, down 6% year over year.
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Adjusted Operating Income: $159 million with an operating margin of 2.8%.
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Interest Expense: $62 million, decreased by $12 million year over year.
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Adjusted Effective Tax Rate: 23%.
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Inventory Days: Improved by 3 days sequentially to 98 days.
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Cash from Operations: $338 million generated in the quarter.
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Debt Reduction: Decreased by $385 million in the quarter.
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Share Repurchases: $51 million worth of shares repurchased.
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Dividend: $0.33 per share, totaling $29 million.
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Guidance for Q3 FY2025: Sales between $5.05 billion and $5.35 billion; EPS between $0.65 and $0.75.
Release Date: January 29, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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Avnet Inc (NASDAQ:AVT) achieved sales of $5.7 billion and adjusted EPS of $0.87, both above the midpoint of their guidance.
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The company generated over $300 million of cash flow from operations in the quarter.
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Sales in Asia increased 8% year over year, showing strong performance in that region.
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Avnet Inc (NASDAQ:AVT) is making progress on optimizing inventory and managing costs.
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The company is focused on higher margin offerings such as embedded solutions, demand creation, and IP&E products, which are expected to yield future growth and gross margin benefits.
Negative Points
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Sales declined 25% in EMEA and 14% in the Americas year over year, indicating weak performance in these regions.
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Gross margin of 10.5% was 86 basis points lower year over year, primarily due to a sales mix shift to Asia.
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The global book to bill ratio remains below parity, with Europe having the weakest ratio.
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Farnell sales were flat sequentially and down year over year, facing competitive pricing pressures.
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The current market correction is prolonged and uncertain, impacting Avnet Inc (NASDAQ:AVT)'s ability to predict recovery timelines.
Q & A Highlights
Q: How is Avnet viewing the overall industry cycle beyond the March quarter, and has anything changed in the past 90 days? A: Philip Gallagher, CEO, noted that while the semiconductor cycle is challenging with excess inventory, he remains bullish on the industry long-term. He anticipates recovery starting in the summer but acknowledges the current environment is more complex due to geopolitical factors and inventory levels. The company is managing through the cycle and is prepared for when the market rebounds.