Thursday, Avnet, Inc. (AVT) reported a lower profit for the first quarter of fiscal 2010, yet came in ahead of Street expectations. The company also provided second-quarter guidance, with earnings expected to come in above current estimates.
The Phoenix, Arizona-based electronic parts and computer hardware distributor's net income for the first quarter of its fiscal 2010 declined to $50.9 million or $0.33 per share from a net income of $90.3 million or $0.59 per share a year ago.
Quarterly results include restructuring, integration, and other items amounting to $16.3 million after-tax or $0.11 per share for this year's quarter, compared to $11.4 million after-tax or $0.08 per share in the previous-year quarter.
Excluding items, net income for the first quarter dropped to $67.2 million or $0.44 per share from $101.7 million or $0.67 per share in the prior-year period. On average, 12 analysts polled by Thomson Reuters estimated earnings of $0.34 per share for the quarter. Analysts' estimates typically exclude special items.
First-quarter results included fourteen weeks as compared to the typical thirteen weeks.
Revenues for the first quarter decreased 3.1% to $4.36 billion from $4.49 billion for the first quarter of 2008. Analysts expected revenues of $3.92 billion for the quarter. Revenue decreased 0.6% excluding the impact of changes in foreign currency exchange rates.
Segment wise, revenue from electronics marketing decreased 9.8% to $2.44 billion while revenue from technology solutions rose 6.9% to $1.92 billion.
Operating income for the first quarter plunged to $89.0 million from $154.6 million in the year-ago quarter. Excluding items, operating income as a percentage of sales was 2.46%, compared to 3.66% in the prior-year first quarter and 2.26% in the prior-year fourth quarter.
Cost of sales declined to $3.86 billion from $3.91 billion in the comparable quarter last year.
Roy Vallee, chief executive officer of Avnet commented, "While the impact of the global economic slowdown remained evident in our year-over-year revenue decline, our better than expected sequential growth rates provides additional confidence that the business environment is improving."
Looking forward to the second quarter of its fiscal 2010, the company expects earnings in the range of $0.52 to $0.60 per share. Avnet forecast sales between $4.10 billion and $4.70 billion for the second quarter. Analysts currently expect earnings of $0.51 per share on revenues of $4.13 billion for the second quarter.
AVT is gaining $1.63 or 6.89%, and is trading at $25.30 on a volume of 1.10 million shares on the New York Stock Exchange.
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