- GAAP diluted earnings per share of $0.19, compared with a GAAP diluted loss per share of $0.19 in the prior quarter, a 200 per cent increase
- Sales of Texas Instruments (TI) products were $50 million compared with $399 million in the prior year
Avnet, Inc announced results for its second quarter ended January 2, 2021. It said that sales of $4.7 billion up from $4.5 billion in the prior year quarter, supported by record sales in Asia of $2.2 billion, up 16 per cent year over year. GAAP diluted earnings per share of $0.19, compared with a GAAP diluted loss per share of $0.19 in the prior quarter, a 200 per cent increase.Non-GAAP adjusted diluted earnings per share of $0.48, compared with $0.36 in the prior quarter, a 33 per cent increase. Farnell operating margins increased sequentially 97 basis points to 4.5 per cent.
Avnet Chief Executive Officer Phil Gallagher said, “Improvements in our Farnell, EMEA and Americas businesses, complemented by a record revenue quarter in Asia, reflect our continued progress in driving operational efficiencies and enhancing key business lines through strategic investments. We’ve seen tangible results from this back to the basics strategy over the past two quarters with increased sales, improving returns on capital and a stronger balance sheet.”
He added, “As a result, we are better positioned today to manage our backlog and working capital to navigate uncertainties resulting from COVID-19. I am incredibly proud of our team’s resilience amidst the challenges this past year. They’ve delivered significant value in providing uninterrupted service at a global scale and in working collaboratively with our customers and suppliers to manage forecasts, navigate current market dynamics and mitigate supply chain risk.”
Net working capital of 75 days
The GAAP operating income margin of 1.2 per cent, compared with 0.4 per cent the prior quarter, and an adjusted operating income margin of 1.7 per cent, compared with 1.4 per cent in the prior quarter. It said that the company achieved net working capital of 75 days, generating $85 million of cash flow from operations. Sales of Texas Instruments (TI) products were $50 million compared with $399 million in the prior year. When excluding TI, organic sales grew 9.3 per cent year over year on a constant currency basis.
Avnet CFO Tom Liguori said, “During the second quarter, we delivered sales of $4.7 billion and adjusted diluted earnings per share of $0.48, driven by strong execution and a streamlined cost structure that has allowed us to achieve increased revenue without adding significant operating expense. Our year over year top line growth and careful working capital management enabled us to achieve our goal of 75 net working capital days. “
He added, “Our $75 million operating expense reduction plan was fully implemented in the quarter, driving our ninth consecutive quarter of positive operating cash flows. We remain on track to achieve our $245 million operating expense reduction plan by the end of fiscal year 2022. We are delivering improved financial and competitive performance, building Avnet’s core distribution business while still strategically investing in Farnell, where we see tremendous opportunity to deliver profitable growth.”
The company also said that it returned $21 million to shareholders with dividends paid during the quarter. It said that it achieved highest quarterly transportation revenue in 6 quarters in the Americas and Asia. Farnell selected as the authorized global distributor for National Instruments (NI).Avnet rejoined the Electronic Components Industry Association (ECIA) as a distributor member.