Technology Distributor Avnet Q2 Hits Double-Digit GrowthBy Jessica Davis | Posted 2010-01-29 Email Print
Avnet, reporting second-quarter earnings, is forecasting growth for 2010 coming off the recessionary year of 2009. Technologies that showed strength in the second quarter included storage, software and servers.
Roy Vallee, chairman and CEO of Avnet (NYSE:AVT), told financial analysts that the distribution giant's fiscal second quarter showed strength, particularly in December, perhaps because IT organizations were looking to spend their allotted budgets before the end of the calendar year.
Avnet's revenue hit $4.83 billion for its fiscal 2010 second quarter ending Jan. 2, representing an increase of 13.2 percent over the same period last year. Net income was $103.9 million or 68 cents per diluted share, compared with a staggering net loss of $1.205 billion or $7.99 per share for the same period a year ago.
Avnet's IT sales group, Technology Solutions, saw sales of $2.32 billion in the second quarter of fiscal 2010, up 15.8 percent year over year.
And sequentially, sales for the TS group grew 30 percent, TS President Phil Gallagher tells Channel Insider.
"It was certainly a very strong quarter for Technology Solutions," Gallagher says. "We are pleased with the performance of all regions."
In terms of technology, Gallagher says TS saw good growth in both storage and software sales, and server sales grew by 20 percent.
Gallagher tells Channel Insider that macroeconomic conditions have improved, but also TS saw a little better than normal seasonality for December.
"2010 is somewhere in the mid-single digits for growth," he says.
Avnet's Electronics Marketing business—the chip and component sales side of the business—reported sales of $2.52 billion for the fiscal second quarter, an 11 percent increase year over year.
Looking ahead to the third quarter, Avnet is forecasting EM sales in the range of $2.55 billion to $2.85 billion and TS sales in the range of $1.55 billion to $1.85 billion. Consolidated sales are forecast to be between $4.10 billion and $4.70 billion for the third quarter.