Avnet Reports 11.6% Decline in Revenue and 71.8% Drop in Net Income for First Quarter of Fiscal 2025

Avnet, Inc. reported its financial results for the first quarter of fiscal 2025, ending September 28, 2024, revealing significant declines in revenue and profitability compared to the same period in the previous fiscal year. Total sales for the quarter were $5,604.2 million, down $731.5 million (11.6%) from $6,335.6 million in the first quarter of fiscal 2024. This decline was primarily attributed to reduced demand for electronic components amid a market downturn, with sales in the Electronic Components segment decreasing by 11.1% to $5,257.1 million and Farnell segment sales falling by 17.6% to $347.1 million.

Gross profit also saw a substantial decrease, totaling $607.4 million, down $141 million (18.8%) from $748.1 million in the prior year. Operating income dropped to $142.2 million, a decrease of $111.5 million (44.0%), while net income fell to $59.0 million, down $150.3 million (71.8%) from $209.3 million in the first quarter of fiscal 2024. Earnings per share reflected this downturn, with diluted earnings per share at $0.66 compared to $2.25 in the previous year.

The company’s total current assets increased to $10,679.2 million as of September 28, 2024, from $10,370.6 million as of June 29, 2024. However, total current liabilities also rose to $4,747.9 million from $4,465.3 million, leading to an increase in total liabilities to $7,559.8 million from $7,283.6 million. Total shareholders’ equity improved to $5,037.7 million, up from $4,925.5 million.

Avnet undertook restructuring efforts during the quarter, incurring $23.5 million in related expenses, primarily due to a planned reduction of approximately 40 employees across operations and distribution centers. The company also recorded $26.4 million in total restructuring, integration, and other expenses, significantly higher than the $7.1 million recorded in the same quarter last year.

Cash flows from operating activities showed a positive shift, generating $106.3 million compared to a cash outflow of $41.3 million in the prior year. The company maintained a strong liquidity position with cash and cash equivalents of $267.5 million, although this was a decrease from $310.9 million at the end of the previous quarter.

In terms of strategic developments, Avnet's Board of Directors approved a dividend of $0.33 per share, resulting in $28.9 million in dividend payments during the quarter. The company also repurchased $99.0 million of common stock, reflecting its ongoing commitment to returning value to shareholders.