Yahoo Finance Avnet (AVT) Gains 6% on Q3 Earnings Beat, Strong Q4 Guidance
Avnet AVT shares soared 5.6% on Wednesday’s extended trading session after the company reported better-than-expected results in the third quarter of fiscal 2023 and provided impressive guidance for the current quarter.
The company’s fiscal third-quarter non-GAAP earnings were $2.00 per share, which surpassed the Zacks Consensus Estimate of $1.78. However, the reported figure decreased 7% year over year due to the negative impacts of higher interest expenses and an unfavorable currency exchange rate of 37 cents and 9 cents, respectively.
Revenues advanced 0.4% year over year to $6.51 billion. On a constant-currency basis, fiscal third-quarter sales increased 3.4% year over year. The top line also beat the Zacks Consensus Estimate of $6.27 billion.
Avnet’s quarterly results benefited from a strong demand environment for its products and the company’s continued investments in e-commerce and expanding customer relationships. Robust sales in the Americas and the EMEA bolstered revenues in the reported quarter.
Avnet, Inc. Price, Consensus and EPS Surprise
Avnet, Inc. price-consensus-eps-surprise-chart | Avnet, Inc. Quote
Quarterly Details
The Electronic Components segment’s revenues were up 0.7% year over year to $6.06 billion on stellar growth across all regions.
However, the Farnell segment’s revenues declined 3% to $455 million. The segment’s revenues continue to be negatively impacted by supply constraints and pricing.
Revenues from America increased 5.4% year over year, while the EMEA registered sales growth of 9.5%. However, sales from the Asia region plunged 10.1% year over year.
Avnet reported a gross profit of $811.8 million, down from the year-ago quarter’s gross profit of $813 million. The gross margin remained flat on a year-over-year basis at 12.5%.
The adjusted operating income came in at $314.5 million, rising 3.5% year over year. The adjusted operating margin came in at 4.8%, up 15 bps.
Balance Sheet and Cash Flow
As of Apr 1, 2023, AVT had cash and cash equivalents of $185.9 million compared with the $324.8 million reported at the end of the previous quarter.
The long-term debt was $3.03 billion as of Apr 1, up from the $3 billion reported in the prior quarter. Avnet generated operating cash flow of $18 million in the third quarter while using cash worth $948.2 million for operational activities in the first nine months of fiscal 2023.
The company repurchased shares worth $221.3 million and returned $79.8 million to shareholders through dividend payouts in the first nine months of fiscal 2023.
Fourth-Quarter Fiscal 2023 Guidance
Avnet estimates fourth-quarter fiscal 2023 revenues in the range of $6.10-$6.40 billion (midpoint $6.25 billion). Non-GAAP earnings for the current quarter are anticipated in the range of $1.60-$1.70 per share (midpoint $1.65). The Zacks Consensus Estimate for fourth-quarter revenues and adjusted earnings is pegged at $5.76 billion and $1.31 per share, respectively.
Zacks Rank & Stocks to Consider
Currently, Avnet carries a Zacks Rank #4 (Sell). Shares of AVT have declined 2.1% year to date (YTD).
Some better-ranked stocks from the broader technology sector are Wix.com WIX, Zscaler ZS and Check Point Software CHKP, each carrying a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
The Zacks Consensus Estimate for Wix.com’s first-quarter 2023 earnings has been revised upward to 23 cents per share from 16 cents per share 60 days ago. For 2023, earnings estimates have been revised northward by 7 cents to $1.49 per share in the past 60 days.
Wix.com's earnings beat the Zacks Consensus Estimate thrice in the preceding four quarters while missing the same on one occasion, the average surprise being 225%. Shares of WIX have declined 2% YTD.
The Zacks Consensus Estimate for Zscaler's third-quarter fiscal 2023 earnings has been revised 2 cents northward to 39 cents per share in the past 60 days. For fiscal 2023, earnings estimates have been revised northward by 2 cents to $1.52 per share in the past 30 days.
Zscaler’s earnings beat the Zacks Consensus Estimate in the preceding four quarters, the average surprise being 29.7%. Shares of ZS have declined 22% YTD.
The Zacks Consensus Estimate for Check Point Software's second-quarter 2023 earnings has remained unchanged at $1.89 per share for the past 60 days. For 2023, earnings estimates have moved upward by a penny to $7.97 per share in the past 30 days.
Check Point Software's earnings beat the Zacks Consensus Estimate in the preceding four quarters, the average surprise being 3.7%. Shares of CHKP have declined 5.2% YTD.
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