On August 8, 2024, Avnet Inc (AVT, Financial) released its 8-K filing detailing the financial results for the fourth quarter and fiscal year 2024, ending June 29, 2024. Avnet Inc, a global distributor of electronic components, connects suppliers of semiconductors and other components to a base of 2.1 million small- and mid-sized customers in 140 countries. As the third largest semiconductor distributor in the world, Avnet plays a crucial role in the electronics design and development industry.
Performance Overview
Avnet Inc reported fourth-quarter sales of $5.6 billion, surpassing the analyst estimate of $5.37 billion. The diluted earnings per share (EPS) for the quarter stood at $0.91, exceeding the estimated EPS of $0.79. Despite a 15.1% year-over-year decline in sales, the company managed to outperform expectations, showcasing resilience in a challenging market environment.
Key Financial Achievements
For the fiscal year 2024, Avnet Inc reported total sales of $23.76 billion, slightly above the annual estimate of $23.56 billion. The annual diluted EPS was $5.43, surpassing the estimated EPS of $5.30. These achievements highlight Avnet's ability to navigate market challenges effectively and maintain strong financial performance.
Income Statement Highlights
| Metric | Q4 2024 | Q4 2023 | Change Y/Y |
|---|---|---|---|
| Sales | $5,563.0 million | $6,554.6 million | (15.1)% |
| Operating Income | $164.2 million | $283.7 million | (42.1)% |
| Diluted EPS | $0.91 | $1.68 | (45.8)% |
Balance Sheet and Cash Flow Highlights
Avnet Inc's balance sheet remains robust with total assets amounting to $12.21 billion as of June 29, 2024. The company reported cash and cash equivalents of $310.9 million, an increase from $288.2 million in the previous year. The net cash flows provided by operating activities were $689.98 million, a significant improvement from the negative cash flow of $713.70 million in the prior year.
Segment and Geographical Performance
The Electronic Components (EC) segment reported sales of $5.19 billion, a 15.1% decline year-over-year. The EC operating income margin was 4.1%, down from 5.1% in the previous year. The Farnell segment saw sales of $375.2 million, a 15.8% decline year-over-year, with an operating income margin of 4.0%.
| Region | Q4 2024 Sales | Q4 2023 Sales | Change Y/Y |
|---|---|---|---|
| Americas | $1,353.8 million | $1,732.7 million | (21.9)% |
| EMEA | $1,920.3 million | $2,450.6 million | (21.6)% |
| Asia | $2,288.9 million | $2,371.3 million | (3.5)% |
Commentary and Analysis
“We are pleased with our fiscal 2024 performance as we executed well, despite some challenging market conditions,” said Avnet Chief Executive Officer Phil Gallagher. “I want to thank our team for their focus on supporting our supplier and customer partners, growing market share, controlling costs, and managing working capital to drive operating cash flow. Their efforts enabled us to exceed the upper end of our fourth quarter sales and earnings guidance. We are well positioned entering into fiscal year 2025 and I am confident we have the right team and strategy in place to benefit from the eventual market recovery.”
Outlook for Fiscal 2025
Avnet Inc provided guidance for the first quarter of fiscal 2025, with expected sales ranging between $5.25 billion and $5.55 billion, and diluted EPS between $0.80 and $0.90. The company anticipates sales declines in the western regions and growth in Asia, reflecting the ongoing market dynamics.
Overall, Avnet Inc's performance in the fourth quarter and fiscal year 2024 demonstrates its resilience and strategic execution in a challenging market environment. The company's strong financial position and effective cost management provide a solid foundation for future growth and market recovery.
Explore the complete 8-K earnings release (here) from Avnet Inc for further details.
