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Avnet (AVT) Beats Q2 Earnings & Revenue Estimates, Up Y/Y

Avnet AVT reported better-than-expected second-quarter fiscal 2023 results and provided impressive guidance for the second quarter of fiscal 2023.

The company’s fiscal second-quarter non-GAAP earnings were $2 per share, which surpassed the Zacks Consensus Estimate of $1.83. The reported figure jumped 32.5% year over year.

Revenues climbed 14.5% year over year to $6.72 billion. On a constant-currency basis, fiscal second-quarter sales increased 21.1% year over year. The top line also beat the Zacks Consensus Estimate of $6.48 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 Americas, the EMEA and Asia bolstered revenues in the reported quarter.

 

Avnet, Inc. Price, Consensus and EPS Surprise

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

Quarter Details

The Electronic Components segment’s revenues were up 16.3% year over year to $6.31 billion on stellar growth across all regions.

However, the Farnell segment’s revenues inched down 7.5% to $408 million. The segment’s revenues continue to get negatively impacted by currency fluctuations, specifically the weakening British pound and the ongoing shortage of components required to complete single-board computers.

Revenues from America increased 20.8% year over year. Sales from the EMEA and Asia regions jumped 22.6% and 5.6% year over year, respectively.

Avnet reported a gross profit of $784.1 million, up 10% year over year. The gross margin contracted 50 basis points (bps) to 11.7%.

The adjusted operating income came in at $300.5 million, rising 39.5% year over year. The adjusted operating margin came in at 4.5%, up 80 bps.

Balance Sheet and Cash Flow

As of Dec 31, 2022, AVT had cash and cash equivalents of $324.8 million compared with the $80.9 million reported at the end of the previous quarter.

Long-term debt was $3 billion as of Dec 31, up from the $1.83 billion reported in the prior quarter. During the quarter, Avnet used cash worth $321.4 million for operational activities.

In the fiscal second quarter, the company repurchased shares worth $64 million and returned $26 million to shareholders through dividend payouts.

Third-Quarter Fiscal 2023 Guidance

Avnet estimates third-quarter fiscal 2023 revenues in the range of $6.15-$6.45 billion (midpoint $6.30 billion). Non-GAAP earnings for the current quarter are anticipated in the range of $1.75-$1.85 per share (midpoint $1.80).

Zacks Rank & Key Picks

Avnet currently carries a Zacks Rank #5 (Strong Sell). Shares of the company have climbed 12.9% in the past year.

Some top-ranked stocks from the broader Computer and Technology sector are Axcelis Technologies ACLS, Bandwidth BAND and Nutanix NTNX. While Axcelis sports a Zacks Rank #1 (Strong Buy), Bandwidth and Nutanix carry Zacks Rank #2 (Buy). You can see the complete list of today's Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for Axcelis’ fourth-quarter 2022 earnings has been revised 41 cents northward to $1.46 per share over the past 30 days. For 2022, earnings estimates have improved by 8.5% to $5.21 per share over the past 30 days.

ACLS’ earnings beat the Zacks Consensus Estimate in each of the preceding four quarters, the average surprise being 23.2%. Shares of the company have risen 81.1% in the past year.

The Zacks Consensus Estimate for Bandwidth’s fourth-quarter 2022 earnings has been revised by a penny to 4 cents per share over the past 90 days. For 2022, earnings estimates have moved north by 25 cents to 37 cents per share in the past 90 days.

BAND's earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 301.8%. Shares of the company have declined 58.5% in the past year.

The Zacks Consensus Estimate for Nutanix's second-quarter fiscal 2023 loss has been revised a penny north to 13 cents per share over the past 30 days. For fiscal 2023, earnings estimates have moved north by 3 cents to 17 cents per share in the past 90 days.

NTNX’s earnings beat the Zacks Consensus Estimate in all the trailing four quarters, the average surprise being 86.1%. Shares of the company have jumped 2.7% in the past year.

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