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Avnet's (AVT) Q3 Earnings & Revenues Beat Estimates, Up Y/Y

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·4 min read
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Avnet AVT reported better-than-anticipated third-quarter fiscal 2022 results and provided and impressive guidance for the fourth quarter of fiscal 2022.

The company’s fiscal third-quarter non-GAAP earnings were $2.15 per share, which surpassed the Zacks Consensus Estimate of $1.51. The reported figure jumped a whopping 190.5% year over year and 42.4% sequentially.

Revenues climbed 32% year over year and 11% sequentially to $6.49 billion. On a constant currency basis, fiscal third-quarter sales increased 35.7% year over year and 11.4% quarter over quarter. The top line beat the Zacks Consensus Estimate of $5.62 billion.

Avnet’s quarterly results benefited from a strong demand environment for its products, and the company’s continued investments in e-commerce and expanding customer relationships. Robust sales in the EMEA and Asia bolstered revenues in the reported quarter. An improvement in America served as a tailwind.

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

The Electronic Components segment’s revenues were up 33.2% year over year to $6.02 billion on stellar growth across all regions.

The Farnell segment’s revenues of $469 million climbed 18.4% year over year.

Revenues from America increased 40.2% year over year. Sales from the EMEA and Asia regions jumped 37.9% and 23.3% year over year, respectively.

Avnet reported gross profit of $813 million, up 43.1% year over year. Gross margin expanded 90 basis points (bps) to 12.5%.

Adjusted operating income came in at $303.7 million, soaring 174.8% year over year. Adjusted operating margin came in at 4.7%, up 243 bps.

While Electronic Components operating margin expanded 178 bps to 4.4%, Farnell operating margin skyrocketed 886 bps to 14.9%.

Balance Sheet and Cash Flow

As of Apr 2, 2022, Avnet had cash and cash equivalents of $199.5 million compared with $167.8 million reported at the end of the previous quarter.

Long-term debt was $922 million as of Apr 2, down from $1.14 billion reported in the prior quarter. The net debt leverage ratio was 1.2 at the end of the fiscal third quarter.

During the first nine months of fiscal 2022, Avnet used cash worth $19.4 million.

Guidance

Avnet estimates fiscal fourth-quarter revenues in the range of $6.0 billion to $6.4 billion (mid-point $6.2 billion), which is higher than the Zacks Consensus Estimate of $5.63 billion at the mid-point. Non-GAAP earnings for the current quarter are anticipated in the range of $1.90-$2.00 per share (mid-point $1.95), higher than the consensus mark of $1.51.

Zacks Rank & Key Picks

Avnet currently has a Zacks Rank #4 (Sell). Shares of AVT have fell 10.4% in the past year.

Some better-ranked stocks from the broader Computer and Technology sector are Yelp YELP and Gogo GOGO, each sporting a Zacks Rank #1 (Strong Buy), Analog Devices ADI carrying a Zacks Rank of 2 (Buy). You can see the complete list of today's Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for Yelp's first-quarter 2022 loss has been revised a couple of cents southward to 11 cents per share over the past 60 days. For 2022, earnings estimates have moved north by 53.6% to $1.06 per share in the past 60 days.

Yelp's earnings beat the Zacks Consensus Estimate in the preceding four quarters, the average surprise being 632.9%. Shares of YELP have fallen 20.2% in the past year.

The Zacks Consensus Estimate for Gogo's first-quarter 2022 earnings has been revised downward by a penny to 13 cents per share over the past 30 days. For 2022, Gogo's earnings estimates have moved north by 25% to 65 cents per share in the past 60 days.

Gogo's earnings beat the Zacks Consensus Estimate in each of the preceding four quarters, the average surprise being 65%. Shares of GOGO have surged 68.9% in the past year.

The Zacks Consensus Estimate for Analog Devices' second-quarter fiscal 2022 earnings has been revised upward by 4 cents to $2.12 per share over the past 30 days. For fiscal 2022, earnings estimates have moved north by 11 cents to $8.43 per share in the past 30 days.

Analog Devices' earnings beat the Zacks Consensus Estimate in each of the preceding four quarters, the average surprise being 6%. Shares of ADI have decreased 2.8% in the past year.


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