Avnet, Inc. (NYSE:AVT) today announced results for the second quarter fiscal year 2015 ended December 27, 2014.
- Sales for the quarter ended December 27, 2014 increased 1.8% year over year to $7.6 billion; and 4.6% in constant currency
- Adjusted operating income of $274.6 million increased 4.3% year over year and adjusted operating income margin of 3.6% increased 9 basis points year over year. Sequentially, adjusted operating income and adjusted operating income margin were up 22.7% and 37 basis points, respectively
- Adjusted net income of $176.0 million increased 7.4% and record adjusted diluted earnings per share of $1.27 increased 8.5% year over year. Sequentially, adjusted net income and adjusted diluted earnings per share increased 22.1% and 24.5%, respectively, driven by the significant profit growth typically associated with the strong seasonal sales performance in the Technology Solutions (TS) segment
Rick Hamada, Chief Executive Officer, commented, “Our team delivered steady progress in our financial performance as revenue and earnings exceeded expectations and earnings per share grew year over year for a sixth consecutive quarter. Despite some currency headwinds beyond our expectations, reported revenue grew 1.8% (4.6% in constant currency) led by a seventh consecutive quarter of year-over-year organic growth at Electronics Marketing (EM). At Technology Solutions, revenue grew an above seasonal 29% sequentially in constant currency driven by the EMEA and Americas regions. Adjusted operating income increased 4.3% year over year primarily led by the EMEA region, where both operating groups improved gross profit margins and realized contributions from expense management. The sequential increase in revenue and profitability, combined with a 2.8% sequential decline in working capital, drove our return on working capital up over 400 basis points and cash flow from operations over $260 million for the quarter. Although we continue to experience an environment of mixed signals regarding overall growth expectations, our team will continue to focus on key levers of profitable growth and build upon this performance."
- Sales increased 6.8% year over year to $4.4 billion and 9.7% in constant currency
- Operating income margin increased 19 basis points year over year to 4.3% due to improvements across all three regions
- Working capital (defined as receivables plus inventories less accounts payables) decreased 4.5% sequentially primarily due to a 10% reduction in inventories
- Return on working capital (ROWC) increased 125 basis points year over year and decreased 162 basis points sequentially
Mr. Hamada added, “Similar to our September quarter, better than expected growth in our select high volume supply chain engagements in Asia drove revenue to the high end of expectations and above normal seasonality. EM Asia grew 17.1% year over year and became the first region at Avnet to exceed $2 billion in quarterly revenue. This strong growth, along with another quarter of high single digit growth in EMEA, drove EM’s revenue up 9.7% year over year in constant currency. Operating income grew 11.5% year over year and operating income margin increased 19 basis points with all three regions contributing to this improvement. In our EMEA region, which now includes the full impact of our MSC acquisition, operating income increased 12.2% year over year and operating income margin expanded 73 basis points. Our value based management discipline was evident as working capital velocity increased both sequentially and year over year. This increase in operating income combined with the improvement in working capital velocity drove ROWC 125 basis points higher year over year led by our Asia region, which increased 270 basis points. With our book to bill ratio at parity, and seasonal growth expected in our higher margin western regions, we feel confident that EM can build on our multi-quarter trend of expanding margins and returns.”