Extra week of sales in Avnet's Q1? That's good, says CEO
Forex hits, but enterprise stuff offsets crappy computing components demand
An extra seven days of sales in Avnet Technology Solutions' latest full quarterly numbers added some much needed top line meat, cut from demand for networking, storage, security and services.
In the enterprise distie's Q1 of fiscal '16, for the 53 weeks ended 3 October, revenue went up 1.3 per cent to $2.498bn, including $225m turned over in the final week. Excluding those additional 168 hours, year-over-year like-for-like sales declined 7.8 per cent.
The appreciating dollar also shaped the financials but in a bad way – revenues actually grew 7.8 per cent in constant currency.
Broken down by region, Avnet's Americas region was up 5.3 per cent to $1.5bn, grew 2.4 per cent in EMEA to $688.8m (up 16 per cent in constant currency), and declined 16.3 per cent to $300.8m in Asia.
Rick Hamada, CEO, said in a statement that "core data centre solutions" offset a challenging computing components business, one that is being dragged down by weak demand for PCs.
Analysts are forecasting some market shrinkage this year, and multiple vendors are battling the burden of ageing inventory.
Cost cutting, termed by Avnet as "operational expense efficiencies," helped boost operating profit by 19.5 per cent to $74.5m. This was "led by our EMEA region, where operating profit more than doubled from the year ago quarter," said the CEO.
Avnet reckoned the computing components business is stabilising, but said that helping resellers convert more customers to the cloud and data centre products is where the action will be. ®