Avnet hit by fall in EMEA component sales

Decent first quarter numbers from the global distributor were tainted slightly by the performance across EMEA

Avnet has announced a 7.8% year on year increase in its first quarter fiscal year 2015 results despite poor results for its technology solution group in EMEA.

The distributor's revenue for the quarter was $6.8bn. At an enterprise level, year-over-year organic revenue grew 5.6% led by a sixth consecutive quarter of year-over-year organic growth in Avnet Electronics Marketing group and a return to growth at Avnet Technology Solutions.

"Our team carried the momentum of fiscal 2014 into our new fiscal year as they leveraged continued revenue growth into another year-over-year increase in EPS,” commented Avnet CEO Rick Hamada. 

At an enterprise level, year-over-year organic revenue grew 5.6% in constant dollars led by a sixth consecutive quarter of year-over-year organic growth at Electronics Marketing (EM), along with a return to positive growth at Technology Solutions (TS).

Avnet Technology Solutions operating group reported that revenue increased 2.4% year-over-year to $2.5bn despite a loss in EMEA of 5.8% due to a decline in the computing components business. The increase was driven by the Americas growth of 11.2%; the first time in 3 years a double digit growth has been recorded.

"In our EMEA region, which declined 5.8% in constant currency, mid-single digit growth in our core enterprise distribution business was offset by a decline in our computing components business,” commented Hamada. “

Reported regional revenue for Avnet Technology Solutions' first quarter fiscal year 2015 was: Americas - $1,433.1m; EMEA - $672.9m and Asia - $359.5m.

“In our TS EMEA region, our team has been driving efficiencies as operating income margin improved both sequentially and year over year,” Hamada continued. “Going forward, we will continue to utilize our disciplined portfolio management to ensure we are focusing our resources on high growth opportunities in the enterprise IT ecosystem."

At a product level, Avnet Technology Solutions experienced year-over-year growth in software, services and networking and security.

The forecast for the second fiscal quarter predicts Techology Solutions  sales to be in the range of $2.85bn to $3.15bn.

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