Avnet Q4 Profit Declines, Yet Results Beat Estimates - Update

(RTTNews) - Electronic components distributor Avnet, Inc. (AVT) Wednesday reported a decline in its fourth-quarter profit, reflecting restructuring, integration and other charges, despite about 5 percent growth in sales. Both adjusted earnings per share, as well as revenues topped analysts' expectations.

Rick Hamada, chief executive officer of the company said, "Our Q4 results came in above our original expectations as better than expected sequential revenue growth at EM and our expense management actions combined to deliver significant bottom-line leverage resulting in operating income growing three times faster than revenue."

The company noted that a substantial majority of its previously announced restructuring initiatives have been implemented.

In the fourth quarter, the company's net income declined to $126.09 million from $133.40 million in the same quarter last year. However, earnings per share remained unchanged at $0.91.

On an adjusted basis, earnings per share for the recent quarter were $0.98, while the company posted $0.99 per share in the prior year. Adjusted earnings were mainly impacted by decline in gross profit margin and higher interest and other expenses, Avnet said.

On average, 10 analysts polled by Thomson Reuters expected the company to earn $0.96 per share for the quarter. Analysts' estimates typically exclude special items.

Sales for the quarter grew 4.5 percent to $6.59 billion from $6.31 billion in the prior-year quarter. Nine analysts had consensus revenue estimate of $6.48 billion for the fourth-quarter. Organic revenue was up 0.2 percent year-over-year and rose 0.5 percent in constant currency.

Restructuring, integration and other charges were $59.85 million, higher than $20.47 million a year earlier.

Looking ahead to the first-quarter, the company expects adjusted earnings per share to be in the range of $0.83 to $0.93. Consolidated sales are anticipated to be between $6.05 billion and $6.65 billion.

Analysts expect the company to report earnings of $0.86 per share, on revenues of $6.31 billion for the first quarter. AVT is currently trading at $38.36, down 0.54 percent.