Avnet Inc.’s net income rose strongly in the September quarter, boosted by surging component sales in Asia and other international markets as well as strong contribution in the Americas from the company’s technology solutions division.
The company said net income jumped to $120.6 million, or 86 cents per share, in the fiscal 2014 first quarter ended Sept. 28, up 20 percent, from $100.3 million, or 70 cents per share, in the September 2013 quarter. Total revenue increased 8 percent in the recent quarter, to $6.4 billion from $5.9 billion in the fiscal 2013 first quarter with both the components and technology solutions businesses posting upper single digit sales gains.
“Our team kicked off the new fiscal year with a solid performance as both operating groups leveraged year-over-year revenue growth into increased margins and returns,” said Rick Hamada, CEO of the Phoenix-based electronics components distributor and technology solutions provider, in a statement.
Avnet Electronics Marketing (EM), the company’s component distribution business, reported sales of $3.94 billion for the September quarter, up 7.8 percent year-over-year, with the majority of the increase coming from Asia and the EMEA regions. The division recorded sales of $1.64 billion in Asia, up 17 percent from the comparable year-ago quarter. EM sales rose 15 percent in the EMEA region to $1.1 billion and fell 7 percent in the Americas to $1.2 billion, the company said.
““Similar to the June quarter, EM sales were at the high end of normal seasonality as organic revenue in constant currency increased 1.2 percent sequentially with strong demand in the Asia region offsetting seasonal declines in the western regions. Asia revenue grew 12.6 percent,” Hamada added in the statement. “The Asia region, which grew to represent 42 percent of EM sales this quarter, delivered record revenue and operating income while driving returns to their highest level in three years.”
Avnet’s Technology Solutions business delivered stronger performance in the Americas with sales rising 11 percent in the region to $1.3 billion but less than 2 percent in Asia. Sales of technology solutions products in the EMEA region were up 11 percent to $694 million, the company said.
For the fiscal 2014 second quarter Avnet forecasts sales in the components unit would be “in the range of $3.80 billion to $4.10 billion.” The Technology Solutions group is forecast to report sales “between $2.85 billion to $3.15 billion,” the company said.