Overview

• Global tech distributor's Q2 sales grew 11.6% yr/yr, beating analyst expectations

• Adjusted EPS for Q2 beat analyst expectations, growing 20.7% yr/yr

• Company generated $208 mln cash flow from operations, reducing inventory by $126 mln

Outlook

• Avnet projects Q3 sales between $6.20 bln and $6.50 bln

• Company expects Q3 adjusted diluted EPS between $1.20 and $1.30

• Avnet anticipates sales growth in Americas and EMEA, decline in Asia due to Lunar New Year

Result Drivers

• ASIA SALES GROWTH - Sixth consecutive quarter of year-over-year sales growth in Asia with record revenues of $3.2 bln

• MARGIN IMPROVEMENT - Adjusted operating income grew two times faster than sales, demonstrating leverage in business model

• INVENTORY OPTIMIZATION - Reduced inventories by $126 mln and days of inventory to 86 days, enhancing cash flow

Key Details

Analyst Coverage

• The current average analyst rating on the shares is "hold" and the breakdown of recommendations is 1 "strong buy" or "buy", 2 "hold" and 3 "sell" or "strong sell"

• The average consensus recommendation for the electronic equipment & parts peer group is "buy."

• Wall Street's median 12-month price target for Avnet Inc is $52.50, about 0.3% below its January 27 closing price of $52.68

• The stock recently traded at 10 times the next 12-month earnings vs. a P/E of 11 three months ago

Press Release: ID:nBwp2wFqa

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