Avnet Expands Services in Americas

Zacks

Electronic parts distributor, Avnet Inc.’s (AVT) business segment, Avnet Electronics Marketing Americas’ operating unit Avnet Embedded, recently declared the inclusion of various advanced services in its product portfolio from two software providers, namely, InduSoft and itSoftware. The company will be also providing several support services and expert guidance to its clients regarding embedded systems through its team of specialized professionals. This was done with the clear intent of enhancing the company’s service offerings, especially in the region of the Americas.

The company through its expert team will be assisting its clients to select and access proper software solutions according to their requirement. Moreover, with the addition of InduSoft and itSoftware’s various software solutions, Avnet Embedded will be able to provide improved and secured software techniques to its customers.

According to management, Avnet Embedded has always focused on offering the best services to its clients to facilitate their future growth. This initiative would not only broaden the company’s product portfolio in the embedded software market but also address the need of improved software solutions of the customers more efficiently.

The company’s expansion plans comprising extension of the existing operations and adding new products to its product lines, particularly in the growing markets, are expected to boost its long-term potential. During the fourth quarter of fiscal 2012, revenues from Avnet’s Electronics Marketing (:EM) segment declined 5.0% from the year-ago quarter to $3.76 billion, within management’s guidance range of $3.75 billion - $4.05 billion. However, we can still be optimistic about a better performance by this segment in the upcoming quarters. For the first quarter of fiscal 2013, the segment’s sales are likely to be within the range of $3.55 billion - $3.85 billion.

Avnet faces fierce competition from big players in the semiconductor industry. One of the stalwarts here is Arrow Electronics Inc. (ARW), which remains an immensely formidable rival, especially in the current times. In addition, there are several other big players such as Wesco International Inc. (WCC) and Anixter International Inc. (AXE) in the industry.

The current Zacks Consensus Estimates for the first quarter of fiscal 2013 and for fiscal 2013 are 84 cents and $4.11, representing year-over-year growth of (6.79%) and 1.33%, respectively. The company currently retains a Zacks #4 Rank, which translates into a short-term ‘Sell’ rating. However, we are maintaining a long-term ‘Neutral’ recommendation on the stock.

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