Avnet Reports Second Quarter 2024 Financial Results
#Avnet--Avnet, Inc. (Nasdaq: AVT) today announced results for its second quarter ended December 30, 2023. Commenting on the Company’s financial results, Avnet Chief Executive Officer Phil Gallagher ...
Second quarter sales of $6.2 billion and diluted EPS of $1.28
Adjusted diluted EPS of $1.40
Electronic Components operating margin of 4.3%
PHOENIX: #Avnet--Avnet, Inc. (Nasdaq: AVT) today announced results for its second quarter ended December 30, 2023.
Commenting on the Company’s financial results, Avnet Chief Executive Officer Phil Gallagher stated, “We are pleased with the second quarter results, which were in line with our expectations. Our team continues to execute well despite the current economic environment and related challenges. We are confident that our strong competitive position and experience managing through many industry cycles will serve us well as we navigate through the next few quarters. We remain encouraged about future opportunities for growth across our end markets.”
Fiscal Second Quarter Key Financial Highlights:
- Sales of $6.2 billion, compared with $6.7 billion in the prior year quarter.
- Diluted earnings per share of $1.28, compared with $2.63 in the prior year quarter.
- Adjusted diluted earnings per share of $1.40, compared with $2.00 in the prior year quarter.
- Operating income margin of 3.8%, compared with 4.5% in the prior year quarter.
- Adjusted operating income margin of 3.9%.
- Electronic Components operating income margin of 4.3%.
- Farnell operating income margin of 4.0%.
- Trailing twelve month cash flows from operations of $169.2 million.
- Returned $59.0 million to shareholders in the quarter from share repurchases.
- Returned $27.8 million to shareholders in dividends during the quarter.
Key Financial Metrics ($ in millions, except per share data) | ||||||||||||||||||||
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Second Quarter Results (GAAP) | ||||||||||||||||||||
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| Dec – 23 |
| Dec – 22 |
| Change Y/Y |
| Sep – 23 |
| Change Q/Q | ||||||||||
Sales |
| $ | 6,204.9 |
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| $ | 6,717.5 |
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| (7.6 | )% |
| $ | 6,335.6 |
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| (2.1 | )% | ||
Operating Income |
| $ | 236.3 |
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| $ | 299.0 |
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| (21.0 | )% |
| $ | 253.8 |
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| (6.9 | )% | ||
Operating Income Margin |
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| 3.8 | % |
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| 4.5 | % |
| (64 | )bps |
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| 4.0 | % |
| (20 | )bps |
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Diluted Earnings Per Share (EPS) |
| $ | 1.28 |
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| $ | 2.63 |
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| (51.3 | )% |
| $ | 2.25 |
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| (43.1 | )% | ||
Second Quarter Results (Non-GAAP)(1) | ||||||||||||||||||||
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| Dec – 23 |
| Dec – 22 |
| Change Y/Y |
| Sep – 23 |
| Change Q/Q | ||||||||||
Adjusted Operating Income |
| $ | 242.2 |
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| $ | 300.5 |
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| (19.4 | )% |
| $ | 261.7 |
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| (7.5 | )% | ||
Adjusted Operating Income Margin |
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| 3.9 | % |
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| 4.5 | % |
| (57 | )bps |
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| 4.1 | % |
| (23 | )bps | |
Adjusted Diluted Earnings Per Share (EPS) |
| $ | 1.40 |
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| $ | 2.00 |
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| (30.0 | )% |
| $ | 1.61 |
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| (13.0 | )% | ||
Segment and Geographical Mix | ||||||||||||||||||||
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| Dec – 23 |
| Dec – 22 |
| Change Y/Y |
| Sep – 23 |
| Change Q/Q | ||||||||||
Electronic Components (EC) Sales |
| $ | 5,812.1 |
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| $ | 6,309.5 |
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| (7.9 | )% |
| $ | 5,914.4 |
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| (1.7 | )% | ||
EC Operating Income Margin |
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| 4.3 | % |
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| 4.7 | % |
| (43 | )bps |
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| 4.6 | % |
| (34 | )bps | |
Farnell Sales |
| $ | 392.8 |
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| $ | 408.0 |
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| (3.7 | )% |
| $ | 421.2 |
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| (6.8 | )% | ||
Farnell Operating Income Margin |
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| 4.0 | % |
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| 9.0 | % |
| (504 | )bps |
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| 4.2 | % |
| (20 | )bps | |
Americas Sales |
| $ | 1,588.5 |
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| $ | 1,681.2 |
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| (5.5 | )% |
| $ | 1,573.5 |
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| 1.0 | % | ||
EMEA Sales |
| $ | 2,113.6 |
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| $ | 2,255.9 |
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| (6.3 | )% |
| $ | 2,308.0 |
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| (8.4 | )% | ||
Asia Sales |
| $ | 2,502.8 |
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| $ | 2,780.4 |
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| (10.0 | )% |
| $ | 2,454.1 |
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| 2.0 | % | ||
_______________
(1) | A reconciliation of non-GAAP financial measures to GAAP financial measures is presented in the “Non-GAAP Financial Information” section of this press release. |
Outlook for the Third Quarter of Fiscal 2024 Ending on March 30, 2024
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| Guidance Range |
| Midpoint |
Sales |
| $5.55B – $5.85B |
| $5.70B |
Diluted EPS (1) |
| $1.05 – $1.15 |
| $1.10 |
_______________
(1) | A reconciliation of non-GAAP guidance to GAAP guidance is presented in the “Non-GAAP Financial Information” section of this press release. |
The above guidance implies a sequential sales decline of 6% to 11% and assumes sales declines for the Western regions versus typical seasonal growth, and a typical seasonal decline in Asia due to the Lunar New Year holiday.
The above guidance also excludes restructuring, integration and other expenses, foreign currency gains and losses, and certain income tax adjustments. The above guidance assumes similar interest expense to the second quarter and an effective tax rate of between 22% and 26%. The above guidance assumes 91 million average diluted shares outstanding and average currency exchange rates as shown in the table below:
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| Q3 Fiscal |
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| 2024 |
| Q2 Fiscal |
| Q3 Fiscal |
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| Guidance |
| 2024 |
| 2023 |
Euro to U.S. Dollar |
| $1.08 |
| $1.08 |
| $1.07 |
GBP to U.S. Dollar |
| $1.27 |
| $1.24 |
| $1.21 |
Today’s Conference Call and Webcast Details
Avnet will host a conference call and webcast today at 8:00 a.m. PT / 11:00 a.m. ET to discuss its financial results, provide a business update and answer questions.
- Live conference call: 877-407-8112 (domestic) or 201-689-8840 (international)
- Conference call replay available through February 7, 2024: 877-660-6853 or 201-612-7415 and using Conference ID: 13743228
- Live and archived webcast can be accessed via Avnet’s Investor Relations web page at: https://ir.avnet.com
Forward-Looking Statements
This document contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, with respect to the financial condition, results of operations, and business of the Company. You can find many of these statements by looking for words like “believes,” “projected”, “plans,” “expects,” “anticipates,” “should,” “will,” “may,” “estimates,” or similar expressions. These forward-looking statements are subject to numerous assumptions, risks, and uncertainties. The following important factors, in addition to those discussed elsewhere in the Company’s Annual Report on Form 10-K for the fiscal year ended July 1, 2023 and subsequent Quarterly Reports on Form 10-Q and Current Reports on Form 8-K, could affect the Company’s future results of operations, and could cause those results or other outcomes to differ materially from those expressed or implied in the forward-looking statements: geopolitical events and military conflicts; pandemics and other health-related crises; competitive pressures among distributors of electronic components; an industry down-cycle in semiconductors, including supply shortages; relationships with key suppliers and allocations of products by suppliers, including increased non-cancellable/non-returnable orders; accounts receivable defaults; risks relating to the Company’s international sales and operations, including risks relating to repatriating cash, foreign currency fluctuations, inflation, duties and taxes, sanctions and trade restrictions, and compliance with international and U.S. laws; risks relating to acquisitions, divestitures, and investments; adverse effects on the Company’s supply chain, operations of its distribution centers, shipping costs, third-party service providers, customers, and suppliers, including as a result of issues caused by military conflicts, terrorist attacks, natural and weather-related disasters, pandemics and health related crises, warehouse modernization, and relocation efforts; risks related to cyber security attacks, other privacy and security incidents, and information systems failures, including related to current or future implementations, integrations, and upgrades; general economic and business conditions (domestic, foreign, and global) affecting the Company’s operations and financial performance and, indirectly, the Company’s credit ratings, debt covenant compliance, liquidity, and access to financing; constraints on employee retention and hiring; and legislative or regulatory changes.
Any forward-looking statement speaks only as of the date on which that statement is made. Except as required by law, the Company assumes no obligation to update any forward-looking statement to reflect events or circumstances that occur after the date on which the statement is made.
About Avnet
As a leading global technology distributor and solutions provider, Avnet has served customers’ evolving needs for more than a century. Decade after decade, Avnet helps its customers and suppliers around the world realize the transformative possibilities of technology. Learn more about Avnet at www.avnet.com. (AVT_IR)
AVNET, INC. CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) | ||||||||||||||||
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| Second Quarters Ended |
| Six Months Ended | ||||||||||||
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| December 30, |
| December 31, |
| December 30, |
| December 31, | ||||||||
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| 2023 |
| 2022 |
| 2023 |
| 2022 | ||||||||
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| (Thousands, except per share data) | ||||||||||||||
Sales |
| $ | 6,204,914 |
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| $ | 6,717,521 |
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| $ | 12,540,562 |
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| $ | 13,467,654 |
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Cost of sales |
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| 5,498,730 |
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| 5,933,421 |
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