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Avnet (AVT) Surpasses Q3 Earnings and Revenue Estimates

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Avnet AVT reported third-quarter fiscal 2021 non-GAAP earnings of 74 cents per share, surpassing the Zacks Consensus Estimate by 32.1%. The reported figure also increased 95% year over year.

Revenues of $4.9 billion also outpaced the Zacks Consensus Estimate by 7.9% and grew 14% year over year.

Robust sales in Asia boosted revenues for the quarter. Improvement in Americas and Europe, Middle East, and Africa (EMEA) regions also served as tailwinds.

Avnet, Inc. Price, Consensus and EPS Surprise

Avnet, Inc. Price, Consensus and EPS Surprise
Avnet, Inc. Price, Consensus and EPS Surprise

Avnet, Inc. price-consensus-eps-surprise-chart | Avnet, Inc. Quote

Quarter in Detail

Electronic Components segment revenues rose 13.7% year over year to $4.5 billion on strong growth across all regions.

The Farnell segment’s revenues of $396 million increased 18.2% year over year.

Revenues from the Americas declined 3.5% year over year but the same from the EMEA region grew 4.8%. Notably, Asia revenues increased 36.2% year over year.

Avnet reported gross profit of $568.4 million, up 9.5% year over year. Gross margin contracted 40 basis points (bps) to 11.6%.

Adjusted operating income was $110.5 million, increasing 57.1% year over year. Adjusted operating margin came in at 2.3%, up 62 bps.

Adjusted operating expenses rose 2% year over year to $457.8 million due to the company’s decision to keep operating its existing facility and lease distribution center.

Balance Sheet and Cash Flow

As of Apr 3, 2021, Avnet had cash and cash equivalents of $323 million compared with $376.3 million recorded at the end of the previous quarter.

Long-term debt was $895.9 million as of Apr 3, up from $895.6 million reported in the prior quarter.

Net debt leverage ratio was 2.0 at the end of the reported quarter. Operating cash flow was $197.5 million at the end of third-quarter fiscal 2021. Avnet returned $21 million to shareholders in the form of dividends in the reported quarter.

Fourth-Quarter Fiscal 2021 Guidance

Avnet estimates fiscal fourth-quarter revenues in the range of $4.7-$5.1 billion. Non-GAAP earnings for the current quarter are anticipated in the range of 71-77 cents per share.

Zacks Rank and Other Stocks to Consider

Avnet currently carries a Zacks Rank #2 (Buy).

Other top-ranked stocks in the broader technology sector include Lam Research Corporation LRCX, Micron Technology, Inc. MU and LG Display Co., Ltd. LPL, each sporting a Zacks Rank #1 (Strong Buy), at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Long-term earnings growth rate for Lam Research, Micron and LG Display is currently projected at 32.8%, 15.7% and 29.8%, respectively.

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