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AVX Corp. Reports Operating Results (10-Q)

November 04, 2010 | About:
10qk

10qk

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AVX Corp. (AVX) filed Quarterly Report for the period ended 2010-09-30.

Avx Corp. has a market cap of $2.51 billion; its shares were traded at around $14.85 with a P/E ratio of 14.8 and P/S ratio of 1.9. The dividend yield of Avx Corp. stocks is 1.3%. Avx Corp. had an annual average earning growth of 11.1% over the past 5 years.AVX is in the portfolios of Third Avenue Management, Chuck Royce of Royce& Associates, John Buckingham of Al Frank Asset Management, Inc., Paul Tudor Jones of The Tudor Group, Bruce Kovner of Caxton Associates, Jim Simons of Renaissance Technologies LLC.

Highlight of Business Operations:

Net income for the quarter ended September 30, 2010 was $67.9 million, or diluted earnings per share of $0.40, compared to $31.6 million, or $0.19 diluted earnings per share, for the quarter ended September 30, 2009. This increase is a result of the factors set forth below.

Our sales to independent electronic distributor customers represented 42.6% of total sales for the three months ended September 30, 2010, compared to 38.3% for the three months ended September 30, 2009. Overall distributor inventories increased during this quarter as distributor customers increased their inventory purchases to meet the increased demand for electronic component products to satisfy the improved market environment when compared to the same period last year. Our sales to distributor customers involve specific ship and debit and stock rotation programs for which sales allowances are recorded as reductions in sales. Such allowance charges were $8.4 million, or 4.4% of gross sales to distributor customers, for the three months ended September 30, 2010 and $7.4 million, or 5.8% of gross sales to distributor customers, for the three months ended September 30, 2009. Applications under such programs for the quarters ended September 30, 2010 and 2009 were approximately $7.2 million and $6.8 million, respectively.

Gross profit margin in the three months ended September 30, 2010 was 28.4% of sales, or $122.4 million, compared to a gross profit margin of 20.8%, or $64.7 million, in the three months ended September 30, 2009. This overall increase is primarily attributable to an improved product mix and higher sales resulting from the overall improvement in global economic conditions. The improved gross margin percentage also reflects our focus on higher-margin, value-added products in addition to leverage from higher manufacturing volumes and productivity improvements. During the quarter ended September 30, 2009, we recorded $0.6 million of restructuring charges. The movement of the U.S. dollar against certain foreign currencies resulted in a favorable impact of approximately $6.5 million on cost of sales when compared to the same period last year.

Net income for the six months ended September 30, 2010 was $120.2 million, or diluted earnings per share of $0.71, compared to $55.9 million, or $0.33 diluted earnings per share, for the six months ended September 30, 2009. This increase is a result of the factors set forth below.

Gross profit in the six months ended September 30, 2010 was 27.2% of sales, or $225.0 million compared to a gross profit margin of 19.7%, or $118.9 million, in the six months ended September 30, 2009. This overall increase is primarily attributable to an improved product mix and higher sales resulting from the overall improvement in global economic conditions. The improved gross margin percentage also reflects our focus on higher margin value-added products in addition to leverage from higher manufacturing volumes and productivity improvements. During the six month period ended September 30, 2009, we recorded $1.3 million of restructuring charges. The movement of the U.S. dollar against certain foreign currencies resulted in a favorable impact of approximately $9.6 million on cost of sales when compared to the same period last year.

Other income increased $0.1 million to $4.6 million in the six months ended September 30, 2010 compared to $4.5 million in the same period last year. This increase is primarily due to lower interest income resulting from lower interest rates on cash and securities investment balances offset by higher net currency exchange gains for the first half of this fiscal year when compared to the same six month period last year. In addition, other income for the six months ended September 30, 2009 included a charge of $0.4 million due to the decline in value of available-for-sale securities.

Read the The complete Report

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