Avnet AVT reported better-than-expected results for first-quarter fiscal 2025. AVT reported earnings of 92 cents per share for the quarter, which surpassed the Zacks Consensus Estimate of 85 cents.

Quarterly earnings also came way above management’s guidance of 80-90 cents per share. However, the bottom line declined 42.9% year over year due to a decrease in revenues.

AVT’s fiscal first-quarter revenues were $5.6 billion, just above the high end of the company’s guidance of $5.25-$5.55 billion. The figure surpassed the Zacks Consensus Estimate of $5.41 billion. However, on a year-over-year basis, the top line declined 11.6%. 

Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.

Avnet’s overall performance in the fiscal first quarter was driven by strong performance in the Asia region, offset by continued weakness in the West and Farnell business segments.

Looking forward, Avnet provided top-line guidance for the fiscal second quarter, which is above the Zacks Consensus Estimate. The company’s better-than-expected fiscal first-quarter performance, along with upbeat sales guidance for the fiscal second quarter, is likely to boost investors’ confidence in AVT stock. Shares of AVT have risen 14.4% year to date, outperforming the Zacks Electronics - Parts Distribution industry’s return of 7.5%.

Avnet, Inc. Price, Consensus and EPS Surprise

Avnet, Inc. price-consensus-eps-surprise-chart | Avnet, Inc. Quote

Avnet’s Q1 Fiscal 2025 Details

The Electronic Components segment’s revenues were down 11.1% year over year but increased 1.3% sequentially to $5.26 billion. Our estimates for the Electronic Components segment’s revenues were pegged at $5.04 billion.

Farnell sales declined 17.6% year over year and 7.5% sequentially to $347.1 million. Our estimates for the Farnell segment’s revenues were pegged at $359 million.

From a regional perspective, on a year-over-year basis, sales increased 6.2% in Asia to $2.61 billion but declined 27.7% in EMEA to $1.67 billion and 15.5% in the Americas to $1.33 billion.

The adjusted operating income came in at $168.9 million, which decreased 35.4% year over year. The operating income for the Electronic Components segment declined 27.8% to $197 million, while that for Farnell’s fell 88.9% to $2 million.

Avnet’s adjusted operating margin shrank 112 bps to 3% from the year-ago quarter. Electronic Components adjusted operating margin contracted 86 bps to 3.8%, while Farnell’s declined 366 bps to 0.5%.

AVT’s Balance Sheet & Cash Flow

As of Sept. 30, 2024, AVT had cash and cash equivalents of $267.5 million compared with $310.9 million reported at the end of the previous quarter.

The long-term debt was $2.43 billion as of Sept. 30, 2024, which remained flat compared with the previous quarter. Avnet generated nearly $106.3 million of cash from operational activities during the fiscal first quarter of fiscal 2025.

In the quarter, AVT repurchased approximately $100 million worth of shares, which represented more than 2% of shares outstanding and returned $28.9 million to shareholders in dividends.