© daniel schweinert Components | October 11, 2012

Avnet with USD 5.8bn in sales

Avnet's sales for the first quarter of fiscal 2013 ended September 29, 2012 will be approximately $5.85 billion, roughly 9% below the year-ago quarter and towards the lower end of original expectations.
Sales at Electronics Marketing (EM) and Technology Solutions (TS) for the September quarter are expected to be approximately $3.65 billion and $2.20 billion, respectively. The Company also indicated that its diluted earnings per share, excluding restructuring, integration and other charges, is expected to be between $0.52 and $0.58, below its previously announced expectations.

The revised estimated earnings per share for the September 2012 quarter is primarily attributable to the combined negative impacts of lower than expected revenues, most notably at TS, lower gross profit margin in the Western regions at EM associated with the weaker sales environment and a greater than anticipated geographic mix shift in the EM business where better than expected sales in the lower-margin Asia region were more than offset by weaker sales in the higher-margin Western regions.

Rick Hamada, Chief Executive Officer, commented:

"It appears the uncertain macroeconomic conditions continue to negatively impact key areas of end demand in our served markets as our overall revenue for the quarter finished weaker than expected, particularly in the Americas region. The shortfall to our expectations was more acute at our TS business, where we experienced a second consecutive quarter of weaker than expected transaction activity at the end of the quarter as customers delayed IT projects.

At EM, although overall sales were relatively in line with initial expectations, the lower-margin Asia business had a stronger than expected quarter, which was offset by a pronounced slowdown in the Americas region. This overall shortfall in Avnet's revenue accounted for more than half of the lowered earnings expectations while the regional mix shift and lower gross profit margins at EM accounted for the remainder.

As a response to these developments, we are evaluating resource commitments across the portfolio and have identified further expense alignment actions in addition to the expense reductions of $40 - $50 million that we announced in August. We remain steadfastly committed to monitoring market developments and taking actions consistent with the pursuit of our long-term operating goals."
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