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Avnet Stock Plunges 10% as Q2 Earnings Miss Estimates, Down Y/Y
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Avnet (AVT - Free Report) shares were trading 9.8% lower in the pre-market trade today as it delivered lower-than-expected second-quarter fiscal 2025 bottom-line results with non-GAAP earnings of 87 cents per share. Despite quarterly earnings complying with management’s guidance of 80-90 cents per share, it missed the Zacks Consensus Estimate by 1.14%. The bottom line declined 38% year over year, demonstrating a weaker operating margin compared to the previous year.
In the trailing four quarters, AVT’s earnings beat the Zacks Consensus Estimate twice and missed twice, the average surprise being 8.7%.
Avnet’s revenues of $5.7 billion for the second quarter of fiscal 2025 surpassed the consensus mark by 2.01% and came at the high-end management’s guidance of $5.4-$5.7 billion. However, the top line decreased by 9% on a year-over-year basis, reflecting challenging market conditions in the West specifically Europe, partially offset by the strong performance in Asia.
The Electronic Components segment’s revenues were down 8.5% year over year but increased 1.2% sequentially to $5.32 billion. Our estimates for the Electronic Components segment’s revenues were pegged at $5.19 billion.
Farnell sales declined 12% year over year and 0.4% sequentially to $345.6 million. Our estimates for the Farnell segment’s revenues were pegged at $359.7 million.
From a regional perspective, on a year-over-year basis, sales increased 8.4% in Asia to $2.71 billion but declined 25.1% in EMEA to $1.58 billion and 13.8% in the Americas to $1.37 billion.
The adjusted operating income came in at $159.5 million, which decreased 34.2% year over year. The adjusted operating income for the Electronic Components segment declined 27% to $182 million, while that for Farnell’s fell 78% to $3 million.
Avnet’s adjusted operating margin shrank 110 bps to 2.8% from the year-ago quarter. Electronic Components adjusted operating margin contracted 85 bps to 3.4%, while Farnell’s declined 299 bps to 1%.
AVT’s Balance Sheet & Cash Flow
As of Dec. 28, 2024, AVT had cash and cash equivalents of $172.1 million compared with $267.5 million reported at the end of Sept. 30, 2024.
The long-term debt was $2.57 billion as of Dec. 28, 2024, higher than the $2.43 billion reported in the previous quarter. Avnet generated $338 million of cash from operational activities during the fiscal second quarter of fiscal 2025.
In the third quarter, AVT repurchased approximately $51 million worth of shares, representing 1.1% of shares outstanding. AVT returned $29 million to shareholders in dividends.
AVT’s Q3 Guidance Not So Promising
For the third quarter of fiscal 2025, Avnet anticipates revenues in the range of $5.05-$5.35 billion (midpoint of $5.20 billion). The Zacks Consensus Estimate for revenues is pegged at $5.59 billion, suggesting a year-over-year decline of 1.1%.
AVT expects non-GAAP earnings in the range of 65-75 cents per share. The consensus mark for the bottom line is pinned at $1.09, suggesting a year-over-year decline of 0.9%.
The aforementioned guidance suggests a sequential decline in sales between 6% and 11%. In comparison to normal seasonal sales growth, this sales guidance suggests anticipations of modest sales declines in the western regions and seasonal sales declines in Asia as a result of the Lunar New Year.
GTLB shares have dropped 1.1% for the past year. The Zacks Consensus Estimate for GTLB’s full-year 2025 earnings is pegged at 63 cents per share, up 37% over the past 60 days, suggesting an increase of 215% from the year-ago quarter’s reported figure.
PL shares have surged 145.5% in the past year. The Zacks Consensus Estimate for PL’s full-year fiscal 2025 loss has contracted to 15 cents from the year-ago quarter’s loss of 50 cents.
FTNT shares have gained 54% for the past year. The Zacks Consensus Estimate for FTNT’s full-year 2025 earnings is pegged at $2.39 per share, up by a couple of pennies over the past 60 days, suggesting an increase of 6.5% from the year-ago quarter’s reported figure.
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Avnet Stock Plunges 10% as Q2 Earnings Miss Estimates, Down Y/Y
Avnet (AVT - Free Report) shares were trading 9.8% lower in the pre-market trade today as it delivered lower-than-expected second-quarter fiscal 2025 bottom-line results with non-GAAP earnings of 87 cents per share. Despite quarterly earnings complying with management’s guidance of 80-90 cents per share, it missed the Zacks Consensus Estimate by 1.14%. The bottom line declined 38% year over year, demonstrating a weaker operating margin compared to the previous year.
Find the latest EPS estimates and surprises on Zacks Earnings Calendar.
In the trailing four quarters, AVT’s earnings beat the Zacks Consensus Estimate twice and missed twice, the average surprise being 8.7%.
Avnet’s revenues of $5.7 billion for the second quarter of fiscal 2025 surpassed the consensus mark by 2.01% and came at the high-end management’s guidance of $5.4-$5.7 billion. However, the top line decreased by 9% on a year-over-year basis, reflecting challenging market conditions in the West specifically Europe, partially offset by the strong performance in Asia.
Avnet, Inc. Price, Consensus and EPS Surprise
Avnet, Inc. price-consensus-eps-surprise-chart | Avnet, Inc. Quote
Avnet’s Q2 2025 Details
The Electronic Components segment’s revenues were down 8.5% year over year but increased 1.2% sequentially to $5.32 billion. Our estimates for the Electronic Components segment’s revenues were pegged at $5.19 billion.
Farnell sales declined 12% year over year and 0.4% sequentially to $345.6 million. Our estimates for the Farnell segment’s revenues were pegged at $359.7 million.
From a regional perspective, on a year-over-year basis, sales increased 8.4% in Asia to $2.71 billion but declined 25.1% in EMEA to $1.58 billion and 13.8% in the Americas to $1.37 billion.
The adjusted operating income came in at $159.5 million, which decreased 34.2% year over year. The adjusted operating income for the Electronic Components segment declined 27% to $182 million, while that for Farnell’s fell 78% to $3 million.
Avnet’s adjusted operating margin shrank 110 bps to 2.8% from the year-ago quarter. Electronic Components adjusted operating margin contracted 85 bps to 3.4%, while Farnell’s declined 299 bps to 1%.
AVT’s Balance Sheet & Cash Flow
As of Dec. 28, 2024, AVT had cash and cash equivalents of $172.1 million compared with $267.5 million reported at the end of Sept. 30, 2024.
The long-term debt was $2.57 billion as of Dec. 28, 2024, higher than the $2.43 billion reported in the previous quarter. Avnet generated $338 million of cash from operational activities during the fiscal second quarter of fiscal 2025.
In the third quarter, AVT repurchased approximately $51 million worth of shares, representing 1.1% of shares outstanding. AVT returned $29 million to shareholders in dividends.
AVT’s Q3 Guidance Not So Promising
For the third quarter of fiscal 2025, Avnet anticipates revenues in the range of $5.05-$5.35 billion (midpoint of $5.20 billion). The Zacks Consensus Estimate for revenues is pegged at $5.59 billion, suggesting a year-over-year decline of 1.1%.
AVT expects non-GAAP earnings in the range of 65-75 cents per share. The consensus mark for the bottom line is pinned at $1.09, suggesting a year-over-year decline of 0.9%.
The aforementioned guidance suggests a sequential decline in sales between 6% and 11%. In comparison to normal seasonal sales growth, this sales guidance suggests anticipations of modest sales declines in the western regions and seasonal sales declines in Asia as a result of the Lunar New Year.
Zacks Rank & Stocks to Consider
Currently, AVT carries a Zacks Rank #4 (Sell).
Fortinet (FTNT - Free Report) , Planet Labs PBC (PL - Free Report) and Gitlab (GTLB - Free Report) are some better-ranked stocks that investors can consider in the broader Zacks Computer & Technology sector. PL and GTLB sport a Zacks Rank #1 (Strong Buy) each, while FTNT carries a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
GTLB shares have dropped 1.1% for the past year. The Zacks Consensus Estimate for GTLB’s full-year 2025 earnings is pegged at 63 cents per share, up 37% over the past 60 days, suggesting an increase of 215% from the year-ago quarter’s reported figure.
PL shares have surged 145.5% in the past year. The Zacks Consensus Estimate for PL’s full-year fiscal 2025 loss has contracted to 15 cents from the year-ago quarter’s loss of 50 cents.
FTNT shares have gained 54% for the past year. The Zacks Consensus Estimate for FTNT’s full-year 2025 earnings is pegged at $2.39 per share, up by a couple of pennies over the past 60 days, suggesting an increase of 6.5% from the year-ago quarter’s reported figure.