Third Quarter Key Financial Highlights
- Delivered sales of $4.70 billion, in line with guidance
o In constant currency, sales rose 1.2% compared to the year ago period
- GAAP diluted EPS from continuing operations totaled $0.87
o Adjusted diluted EPS was $1.09, up 4.8% sequentially and 6.9% from a year ago
- GAAP operating income margin of 3.3%, was up 136 basis points sequentially
o Adjusted operating income margin was 3.8%, up from 3.6% a year ago
- Cash flow from operations totaled $269 million
- Premier Farnell (Farnell) adjusted operating margin rose to 12.4% from 10.8% in the prior year
- IoT pipeline now exceeds $600 million, and has expanded to new markets including industrial equipment and manufacturing
- Returned $139 million to shareholders with $117 million of share repurchases and dividends totaling $22 million
“I am pleased with the strong execution we demonstrated this quarter,” said Avnet CEO Bill Amelio. “We saw continued strength in our Americas and EMEA regions and solid performance in the higher margin interconnect and passives segment. Overall, we improved operating income and earnings per share and expanded our operating margins compared to a year ago. These results demonstrate the progress of our transformation and the value our unique ecosystem is delivering to our customers. With continued increases in our solutions pipeline and strong execution momentum, we are well positioned to achieve our long-term growth targets and deliver sustained shareholder returns.”
“We executed well this quarter reducing costs, expanding operating margin and growing EPS, all while facing macro-economic headwinds in Asia as well as the Brexit uncertainties which impacted Farnell growth,” stated Tom Liguori, Avnet Chief Financial Officer. “Farnell still delivered a strong improvement in operating margin, which rose to 12.4% from 10.8% a year ago, supporting the transformational potential of this business longer term. We generated significant operating cash flow this quarter and returned $139 million to shareholders through stock buybacks and dividend.”
Additional Third Quarter Fiscal 2019 Highlights and Key Developments
- Aligned with BitPay, the largest global blockchain payment provider, to accept cryptocurrency for products and services further breaking down the barriers facing customers who are striving to bring their ideas to market.
- Announced Avnet Direct Connect, a new service that delivers powerful financial efficiencies where Avnet handles all the hardware integration, configuration, QA testing and system delivery allowing customers to focus on their software-based innovation.
- Teamed up with Octonion and Orange to launch a customized, modular ‘plug and play’ Avnet SmartEdge Agile IoT device using Octonion’s Brainium meta-sensing (AI) software designed for the LTE-M network.
- Released a new development board based upon Xilinx technology, which offers engineers and makers a price-competitive development platform for rapidly prototyping breakthrough ideas in AI, IoT and robotics for smart home, automotive and industrial control applications.
- Completed the sale of real estate in Europe, which generated $41 million of cash flow and a gain on sale of $15 million.
Awards and Notable Recognition Received During the Quarter
- Named among the “World’s Most Admired Companies” for 2019, marking the 14th time that the company has been recognized by FORTUNE for its strongly positive reputation
- Named one of the World’s Most Ethical Companies in 2019 by the Ethisphere® Institute, a global leader in defining and advancing the standards of ethical business practices
- Won Preferred Partner Award from Kitron (EBV Elektronik, which operates in Europe, Israel and South Africa)
- Awarded Global Supplier of the Year and Supplier of the Year in EMEA (Avnet Silica) by ON Semiconductor
- Garnered the UK and Ireland Distributor of the Year award (Avnet Silica) from STMicroelectronics
- Won the 2018 TDK Senten Manten award (Farnell Europe); which translates as “Perfect Result”
- Received 2018 Business Award (Avnet Taiwan) from Askey Computer Corporation
- Won Fulfillment Excellence 2018 Supplier Award (Avnet China) from ABB
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Avnet is a global technology solutions provider with an extensive ecosystem delivering design, product, marketing and supply chain expertise for customers at every stage of the product lifecycle. We transform ideas into intelligent solutions, reducing the time, cost and complexities of bringing products to market. For nearly a century, Avnet has helped its customers and suppliers around the world realize the transformative possibilities of technology. Learn more about Avnet at www.avnet.com.