The season of goodwill was not embraced by purchasers of electronic components from distributors if Avnet's results are a guide.
Roy Vallee (pictured), chairman and chief executive officer described his company's second quarter as "unusually challenging as demand weakened through the quarter culminating in with lower than expected revenue in December."
Avnet won't take much comfort from not being alone in this predicament. Virtually every UK company reporting results recently has alluded to a frightening decline in the latter months of last year.
Avnet's revenues for the second quarter were $4.27bn, down 10.2 per cent on the same quarter in 2008 and 6.4 per cent if you take out the impact of currency exchange rates. Net profit for the second quarter was $112.3m compared with $142.2m in the second quarter of 2008.
No part of Avnet escaped the decline.
Said Vallee, "This slowdown was widespread as all three regions and both operating groups contributed to a double digit year over year organic revenue decline for the quarter. Based on these results and our expectation of continued market weakness over the next few quarters we have initiated additional cost reductions of $50m in annualised savings which are expected to be fully implemented by the end of our fiscal year."
He added, "We continue to actively manage costs and working capital to keep our P+L and balance sheet aligned with market realities."
Vallee reckons the strengths of the company will enable it to gain share during the downturn and emerge a stronger company when growth returns.
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