Distributor Avnet has filed financial results for the third quarter of its fiscal 2014, revealing more muted growth than of late with sales up 6.1% – 3.7% organically – after its Avnet Technology Solutions (TS) business saw unexpected organic revenue declines.
Group-wide sales were up to $6.68bn from $6.3bn this time last year, with Avnet Electronics Marketing (EM) up 8% to $4.13bn in a seasonally strong quarter, while TS was down 2.5% (1.9% in constant currency) to $2.55bn.
CEO Rick Hamada said that TS results failed to meet earlier expectations due to a weaker than expected close to the period in the Americas, and softer demand on the computing components side in EMEA. As a result organic Americas revenue dropped 26.1% sequentially and 2.9% year-on-year, and organic EMEA sales dropped 18.2% sequentially and 4.9% year-on-year on a constant currency basis.
Hamada did, however, note a significant upward trend in operating margins in Europe, saying, “we are … encouraged by our performance in EMEA this quarter as their ongoing portfolio management and resource allocation actions resulted in a 65 basis points increase in operating margin year over year”.
“We will continue to monitor our current market conditions carefully and adjust our resources as necessary to resume progress toward our long-term goals,” he added.
There was also good news for group profits, with GAAP net income up 32.1% year-on-year to $113.9m and adjusted net income up 9.6% to $144.1m.