Avnet Q1 Revenues Grow on Acquisitions

By Jessica Davis  |  Posted 2007-10-25 Email Print this article Print
 
 
 
 
 
 
 

The distributor's strategy calls for more acquisitions in key geographic areas such as Asia.

Distribution giant Avnet saw sales from its Technology Solutions group sales grow in its first fiscal quarter by 32.5 percent over the same period a year ago, jumping to $1.61 billion.

In numbers from the quarter, which ended Sept. 29, the Phoenix-based distributor's total revenue grew to $4.10 billion in the first quarter, an increase of 12.3 percent over the same period last year. Net income for the quarter was $105.5 million compared to last year's net income of $64.1 million, according to earnings released Oct. 25.

For the Technology Solutions group, sales in Asia and EMEA (Europe, Middle East and Africa) grew by 31.6 percent and 20.1 percent, respectively, while sales in the Americas were down 5.1 percent. Chairman and CEO Roy Vallee said the company is trying to diversify its Technology Solutions revenue base beyond the Americas—he predicted the group will soon be generating 40 percent of revenue from outside the Americas compared with 30 percent a year ago.

"Technology Solutions performance in the first quarter of fiscal 2008 was further evidence of the leverage that we are achieving through value-creating acquisitions," Vallee said in a statement. "Year over year, TS operating income grew 1.5 times faster than revenue as both the Access and Azure acquisitions contributed to operating margin expansion in our enterprise computer product business."

Overall, the company enjoyed year-over-year organic revenue growth of 2.3 percent for the quarter, but Avnet's overall acquisition strategy in key geographic areas continued to contribute to improvement in operating income, earnings per share and return on capital employed, Vallee said.

"With another $700-plus million of annual revenue from acquisitions completed or announced in the current quarter, our acquisition strategy continues to broaden our revenue base, create cross-selling opportunities and add further operating leverage to our business model going forward," he said.

 
 
 
 
Jessica Davis covers the channel for eWeek and Channel Insider. Her technology journalism career began well before anyone heard of the World Wide Web and has included stints at Infoworld, Electronic News/EDN, and the Philadelphia Business Journal. Her work has also appeared on CNN and Forbes.com. She has covered hardware, software and networking, as well as the business side of technology. She has won several journalism awards, including a national ASBPE award for best staff-written column, and was named Marketing Computers hardest working tech journalist on their inaugural list of top tech journalists. Jessica can be reached at jessica.davis@ziffdavisenterprise.com
 
 
 
 
 
 

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