Avnet's second quarter profit edged up to $147m from $141m a year ago.
Revenues dipped slightly to $6.69bn compared with $6.77bn in the same quarter last year, due mainly to the disastrous floods in Thailand which caused supply disruptions.
Electronics Marketing reported profit down a touch to $174.9m from $183.4m last year. Revenues were $3.6bn, 1% up on Q2 2011. While the Americas business posted a startling 14.9% revenue increase to £1.40bn, Avnet EM's EMEA business went in the opposite direction falling by 12.6% to $943.3m.
Asia/Pacific showed marginal 0.7% growth to $1.25bn.
Rick Hamada (pictured), Avnet Chief Executive Officer commented:"EM revenue came in as expected while the supply chain correction resulted in the second consecutive quarter of below seasonal revenue growth. Despite these challenges, operating income margin came in better than expected due to higher pricing for hard disk drives as a result of supply constraints coupled with expense reductions implemented in light of business conditions. Working capital declined over 9% sequentially with inventory down 5% in reported dollars and 4% after adjusting for acquisitions and currency. With the book to bill ratio approaching parity for the quarter and all three regions showing sequential improvement, we expect revenue growth to return to more seasonal trends in the March quarter, excluding the impact of foreign currency exchange rates. Although the cyclical inventory correction has negatively impacted our results for the past two quarters, on a trailing twelve month basis, EM operating income margin is at the high end of our target range and its ROCE is exceeding our long-range target."
Avnet Technology Solutions grew profit to $118.9m from $105.2m in Q2 2011.
Rick Hamada added, "While the macro environment presented some top line challenges, our team did a good job adjusting to market conditions and delivered another strong quarter with improvements across many parts of our business. Improved profitability at TS, higher prices for hard disk drives and a lower share count helped propel adjusted earnings per share up 28% sequentially and 7% year over year. The improvement at TS and another solid performance at EM drove our return on capital employed back within our target range of 14% to 16% while cash flow from operations for the quarter was strong at $450 million. With EM expected to return to more normalised seasonal growth in the March quarter and an outlook for continued investments in IT data centres, we remain confident we can continue to grow earnings organically and supplement that growth with investments in value-creating M&A and our share repurchase programme."
Avnet is forecasting sales of between $3.55bn to $3.85bn for its Electronics Marketing arm in Q3 2012.
Total revenues are forecast at $5.95bn to $6.55bn;
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