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AVX Corp. Reports Operating Results (10-Q)

February 08, 2011 | About:
10qk

10qk

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AVX Corp. (AVX) filed Quarterly Report for the period ended 2010-12-31.

Avx Corp. has a market cap of $2.65 billion; its shares were traded at around $15.9 with a P/E ratio of 11.6 and P/S ratio of 2. The dividend yield of Avx Corp. stocks is 1.2%. Avx Corp. had an annual average earning growth of 11.1% over the past 5 years.Hedge Fund Gurus that owns AVX: Paul Tudor Jones of The Tudor Group, Jim Simons of Renaissance Technologies LLC. Mutual Fund and Other Gurus that owns AVX: Third Avenue Management, Chuck Royce of Royce& Associates, Chuck Royce of Royce& Associates, John Buckingham of Al Frank Asset Management, Inc..

Highlight of Business Operations:

Net income for the quarter ended December 31, 2010 was $60.6 million, or diluted earnings per share of $0.36, compared to $40.4 million, or $0.24 diluted earnings per share, for the quarter ended December 31, 2009. This increase is a result of the factors set forth below.

Our sales to independent electronic distributor customers represented 41.4% of total sales for the three months ended December 31, 2010, compared to 39.1% for the three months ended December 31, 2009. We believe 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 $8.9 million, or 5.1% of gross sales to distributor customers, for the three months ended December 31, 2010 and $8.1 million, or 5.8% of gross sales to distributor customers, for the three months ended December 31, 2009. Applications under such programs for the quarters ended December 31, 2010 and 2009 were approximately $8.9 million and $7.7 million, respectively.

Gross profit margin in the three months ended December 31, 2010 was 28.2% of sales, or $114.6 million, compared to a gross profit margin of 22.7%, or $76.1 million, in the three months ended December 31, 2009. This overall increase is primarily attributable to higher sales and an improved product mix with higher average selling prices resulting from the overall improvement in global economic conditions and demand for more sophisticated electronic devices requiring higher value electronic components. The improved gross margin percentage reflects our focus on higher-margin, value-added products in addition to leverage from higher manufacturing volumes and productivity improvements. During the quarter ended December 31, 2009, we recorded a $5.0 million reduction in cost of sales related to a vendor settlement partially offset by $1.5 million of restructuring charges. The movement of the U.S. dollar against certain foreign currencies resulted in a favorable impact of approximately $10.0 million on cost of sales when compared to the same period last year.

Net income for the nine months ended December 31, 2010 was $180.7 million, or diluted earnings per share of $1.06, compared to $96.3 million, or $0.57 diluted earnings per share, for the nine months ended December 31, 2009. This increase is a result of the factors set forth below.

Gross profit in the nine months ended December 31, 2010 was 27.5% of sales, or $339.6 million compared to a gross profit margin of 20.8%, or $195.0 million, in the nine months ended December 31, 2009. This overall increase is primarily attributable to higher sales and an improved product mix with higher average selling prices resulting from the overall improvement in global economic conditions. The improved gross margin percentage reflects our focus on higher margin value-added products in addition to leverage from higher manufacturing volumes and productivity improvements. During the nine month period ended December 31, 2009, we recorded a $5.0 million reduction in cost of sales related to a vendor settlement partially offset by $2.8 million of restructuring charges. The movement of the U.S. dollar against certain foreign currencies resulted in a favorable impact of approximately $20.2 million on cost of sales when compared to the same period last year.

Other income increased $2.1 million to $7.1 million in the nine months ended December 31, 2010 compared to $5.0 million in the same period last year. This increase is primarily due to higher net currency exchange gains partially offset by lower interest income resulting from lower overall returns on cash and securities investment balances for the first nine months of this fiscal year when compared to the same nine month period last year. In addition, other income for the nine months ended December 31, 2009 included a charge of $0.4 million due to the decline in value of available-for-sale securities.

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