Acquisitions Help Avnet Beat Q1 Expectations
The addition of three acquisitions helped Avnet beat earnings and sales expectations for the first fiscal quarter ended Oct. 2.
The Phoenix-based distributor completed the acquisitions of Bell Microproducts, Tallard Technologies and Unidux, which helped sales jump to a record $6.18 billion, up 42 percent from $4.36 billion in the year-ago quarter. Net income for the quarter was $138.2 million or 90 cents per diluted share, up from $50 million in profit or 33 cents per share in the year-ago quarter. Analysts had estimated earnings of 81 cents per share on sales of $5.93 billion for the first fiscal quarter.
The acquisitions brought financial benefits, but their integration also enhanced Avnet's competitive position in key technologies, expanded its presence in higher-growth geographies and increased global scale and scope advantages, according to Roy Vallee, chairman and CEO.
"As we complete the integrations throughout the balance of fiscal 2011 and fully realize the anticipated synergies of at least $60 million, we will be better positioned to take advantage of additional growth opportunities and deliver improved financial results," Vallee said in a statement.
The Avnet Technology Solutions group sales increased by 34 percent to $2.56 billion, up from $1.92 billion in the year-ago quarter. Avnet TS sales included 11 percent organic growth excluding the impact of acquisitions.
Next: Current Quarter Forecast Higher Than Expectations
"The integrations of Bell and Tallard are proceeding as planned and we are very comfortable with our enterprise-wide expense synergy target related to Bell," Vallee said in the statement.
For the current quarter, Avnet expects sales between $6.3 billion and $7.0 billion and earnings per share between 99 cents and $1.07. Avnet Technology Solutions sales should be between $2.9 billion and $3.3 billion for the second fiscal quarter. For the current quarter, analysts were estimating earnings of 92 cents per share on $6.23 billion in revenue.
Shares of Avnet were trading at $29.70 Thursday morning, up 67 cents per share or 2.3 percent. Avnet's results come a day after chief competitor Arrow also reported positive financials.