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It has been about a month since the last earnings report for Avnet (AVT). Shares have lost about 1.7% in that time frame, outperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Avnet due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
Avnet's Q2 Earnings Miss Estimates, Revenues Surpass
Avnet reported lower-than-expected second-quarter fiscal 2025 bottom-line results with non-GAAP earnings of 87 cents per share. Despite quarterly earnings complying with management’s guidance of 80-90 cents per share, it missed the Zacks Consensus Estimate by 1.14%. The bottom line declined 38% year over year, demonstrating a weaker operating margin compared to the previous year.
Avnet’s revenues of $5.7 billion for the second quarter of fiscal 2025 surpassed the consensus mark by 2.01% and came at the high-end management’s guidance of $5.4-$5.7 billion. However, the top line decreased by 9% on a year-over-year basis, reflecting challenging market conditions in the West, specifically Europe, partially offset by the strong performance in Asia.
Avnet’s Q2 2025 Details
The Electronic Components segment’s revenues were down 8.5% year over year but increased 1.2% sequentially to $5.32 billion. Our estimates for the Electronic Components segment’s revenues were pegged at $5.19 billion.
Farnell sales declined 12% year over year and 0.4% sequentially to $345.6 million. Our estimates for the Farnell segment’s revenues were pegged at $359.7 million.
From a regional perspective, on a year-over-year basis, sales increased 8.4% in Asia to $2.71 billion but declined 25.1% in EMEA to $1.58 billion and 13.8% in the Americas to $1.37 billion.
The adjusted operating income came in at $159.5 million, which decreased 34.2% year over year. The adjusted operating income for the Electronic Components segment declined 27% to $182 million, while that for Farnell fell 78% to $3 million.
Avnet’s adjusted operating margin shrank 110 bps to 2.8% from the year-ago quarter. Electronic Components adjusted operating margin contracted 85 bps to 3.4%, while Farnell’s declined 299 bps to 1%.
AVT’s Balance Sheet & Cash Flow
As of Dec. 28, 2024, AVT had cash and cash equivalents of $172.1 million compared with $267.5 million reported at the end of Sept. 30, 2024.
The long-term debt was $2.57 billion as of Dec. 28, 2024, higher than the $2.43 billion reported in the previous quarter. Avnet generated $338 million of cash from operational activities during the fiscal second quarter of fiscal 2025.