Avnet Q2 Profit Down - Update

(RTTNews) - Avnet Inc. (AVT) on Thursday reported a drop in profit for the second quarter, as higher income tax expense offset a double-digit revenue growth. Nonetheless, the electronic component distributor's earnings and revenues for the quarter came in ahead of Wall Street estimates.

Phoenix, Arizona-based Avnet's second-quarter profit dropped to $124.9 million or $0.89 per share from $137.5 million or $0.99 per share last year.

Nevertheless, adjusted earnings improved to $1.17 per share from $1.05 per share last year. On average, 12 analysts polled by Thomson Reuters expected earnings of $1.10 per share for the quarter. Analysts' estimates typically exclude special items.

Income tax provision for the quarter were $63.7 million, up from $31.4 million last year.

Avnet's sales for the quarter grew 10.8 percent to $7.42 billion from $6.70 billion a year ago. Twelve analysts had a consensus revenue expectation of $6.97 billion for the quarter.

Chief Executive Rick Hamada attributed the revenue growth to strong demand for IT infrastructure at the company's TS Americas region and continued growth in the Asia components business.

"We are encouraged by the overall progress in our financial performance this quarter as we exceeded our original expectations for both revenue and earnings while also experiencing continued momentum in our year-over-year organic growth," Hamada said.

Avnet Electronic Marketing unit's sales rose 13.14 percent, with Americas down 4.8 percent, EMEA up 33.1 percent and Asia up 16 percent. Avnet Technology Solutions revenues rose 8.0 percent, with sales increasing 16.3 percent in Americas and 1.7 percent in Asia, while EMEA slipped 2.9 percent.

Going forward to the third quarter, Avnet expects adjusted earnings of $1.02 to $1.12 per share and sales of between $6.6 billion and $7.2 billion. Analysts currently expect earnings of $1.03 per share on revenues of $6.62 billion for the third quarter.

AVT closed Thursday's trading at $43.97, down $0.58 or 1.30%, on the NYSE.