Avnet looks for further cost savings after weak Q1

Avnet has blamed a weak European economy and a dip in revenues for a poor first quarter performance and reacted with a pledge to cut costs by a further $50m

A weak and difficult economy in Europe got blamed by Avnet for a poor performance in the distributor's first quarter along with lower than expected revenues.

Sales for the three months ended 29 September will be 9% down on the same period last year at $5.85bn with sales at the Technology Solutions part of the business at $2.20bn.

One of the immediate reactions the firm will make is to expand its cost cutting activities and look to take an additional $50m off its expenses.

Rick Hamada, CEO of Avnet, gave an explanation for the results using what are rapidly becoming well worn phrases about the state of the global economy.

"It appears the uncertain macro economic conditions continue to negatively impact key areas of end demand in our served markets as our overall revenue for the quarter finished weaker than expected, particularly in the Americas region," he said.

"The shortfall to our expectations was more acute at our TS business, where we experienced a second consecutive quarter of weaker than expected transaction activity at the end of the quarter as customers delayed IT projects," he added.

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Avnet hunting further cost savings after weak Q1: http://t.co/c5SfsOAD