Sales up, profits down, results ahead of expectations is the precise summation of Avnet’s fourth quarter results.
Revenues grew healthily by 5% to $6.59bn compared to Q4 last year. Profits fell 4.8% to $133m against Q4 last year.
Rick Hamada, Avnet CEO cited decreased gross profit margins in the EMEA region for the profit decline. He added, “”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. Organic enterprise revenue in constant currency grew 5.0% sequentially, at the high end of normal seasonality as year-over-year growth crossed into positive territory for the first time in seven quarters.”
Avnet Electronics Marketing Q4 revenues were a perky 5.5% up on last year at $3.97bn. The EMEA region contributed a 7.5% revenue uptick to $1.12bn, and the Asia/Pacific business grew a whopping 13.4% to $1.46bn. The Americas fared less well reporting a sales decline of 3.1% to $1.39bn.
The Technology Solutions business saw fourth quarter revenues grow 3.0% year over year to $2.62bn.
Full year revenues for Avnet declined 1% to $25.46bn.
“Our fiscal 2013 results reflect the impact of slower global economic growth and businesses’ cautious spending on technology, particularly in our higher margin western regions,” commented Hamada. “Excluding the impact of acquisitions and currency, revenue declined 4% year over year with our Americas and EMEA regions down 9% and 6%, respectively, while our Asia region grew 5%. As a result of challenging market conditions early in the fiscal year when revenue in our western regions declined double digits year over year, our team responded by aligning both expenses and working capital to marketplace realities and focusing the portfolio on profitable growth opportunities.”
He continued, “These ongoing activities helped to offset some of the impact of this revenue decline and the associated margin pressure as we generated $775 million of adjusted operating income and cash flow from operations grew 32% to $696 million. We continued to invest in future growth opportunities as we deployed $262 million of this cash to acquire companies that are expected to strengthen our competitive position and enhance our margins once the integrations are complete. While there continues to be questions around global macro conditions going forward, we enter fiscal 2014 with a strong focus on our profitable growth initiatives and remain committed to delivering improved financial performance across our portfolio.”
In its 2014 Q1 Avnet is expecting EM sales to be in the range of $3.70bn to $4.00bn and TS sales are expected to be between $2.35bn and $2.65bn.