Avnet Posts Profit But Plans To Cut $90M In Expenses

The results were in line with Wall Street expectations and compared with a loss of $61.4 million, or 51 cents per share, in the year-ago quarter. The year-ago results included $62.1 million in special charges related to Avnet's acquisition of Kent Electronics.

"Although our earnings rose sequentially and year over year, they remain unacceptable in absolute terms," said Roy Vallee, Avnet chairman and CEO, in a statement. "Consequently, we are aggressively engaged in efforts to further streamline the enterprise and lower our cost structure."

The company expects to reduce expenses by about $90 million on an annualized basis and will incur about $50 million in charges, the majority of which will be taken during the current quarter and possibly in the quarter that ends in December, said Ray Sadowski, CFO of Avnet.

The Phoenix-based distributor had revenue of $2.19 billion in the quarter, compared with $2.14 billion for the same quarter last year.

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For the fiscal year, Avnet lost $46.1 million, or 39 cents per share, on sales of $9.05 billion. In its 2002 fiscal year, the company lost $84.4 million, or 71 cents per share, on $8.92 billion in revenue.

The Avnet Computer Marketing group, which includes distributor Avnet Hall-Mark and solution provider Avnet Enterprise Solutions, had $586 million in revenue in the fourth quarter and $2.43 billion in the fiscal year, which increased 3 percent and 1 percent, respectively, year over year.

"Revenue performance from Computer Marketing and Applied Computing came in largely as expected," Vallee said in a statement. "This is the second consecutive quarter of slight year-over-year revenue growth for the enterprise, and despite the sequential sales decline, we continue to see stability in the technology markets we serve."

On Wednesday, shares of Avnet closed at $13.55, down 20 cents per share.