Avnet Reports Slight Q1Earnings Increase to $139 Million
Avnet announced its Q1 2012 results, which included some modest gains but growth was mostly flat overall. Avnet CEO Rick Hamada admitted “Q1 is typically our weakest revenue quarter,” but Wall Street seemed unfazed by the results. Read on for the details.
Avnet‘s sales increased to $6.43 billion, or 3.9 percent year over year for Q1 2012, with “pro forma” revenue up by 3.6 percent — figures that were “roughly flat in constant currency,” according to the distributor. It reported operating income of $223.1 million, again “essentially flat” when compared with Q1 2011. Likewise, Avnet’s GAAP net income came in at $139.0 million, just above last year’s $138.2 million.
Avnet’s Technology Solutions division reported a revenue growth of 1.9 percent compared to the same period a year ago, to $2.6 billion, with software growing more than 40 percent and hardware more than 30 percent. Avnet pointed to the ongoing demand in servers and storage as drivers for that growth.
Hamada had positive words for Q1 2012:
“Our team delivered a strong Q1 performance despite a challenging macro environment. After seven consecutive quarters of strong year-over-year growth, our business slowed this quarter as pro forma revenue was roughly flat year over year in constant currency. … [But,] we are encouraged by the speed with which the electronics supply chain is rebalancing and the relative strength of our computer business outside of EMEA.”
Meanwhile, Wall Street’s reaction was essentially neutral, as Avnet’s stock remained unchanged after hours, at $31.73, representing a marginal bump of 3.6 percent since the opening bell. We’ll keep tabs on Avnet, especially as the distributor expands its vertical-oriented partner offerings, potentially setting up Q2 2012 for more concrete growth.