Avnet (AVT) To Report Q4 Earnings: What???s In The Cards?
Zacks Investment Research | Aug 07, 2017 08:26AM ET
Avnet Inc. (NYSE:AVT) is set to report fourth-quarter 2017 results on Aug 9. Last quarter, the company posted a positive earnings surprise of 2.33%. Let's see how things are shaping up for this announcement.
Factors at Play
Avnet has been taking major restructuring steps to primarily focus on the EM business. In doing so, the company completed the divesture of Technology Solutions business to Tech Data Corporation (NASDAQ:TECD) for approximately $2.645 billion.
The divestment of the Technology Solution division will allow Avnet to focus on high-growth areas such as marketing electronic components and related products in the supply chain. The company intends to use resources to make investments in embedded solutions, IoT and critical digital platforms as well as expand footprint in newer markets.
In Oct 2016, Avnet completed the much-awaited acquisition of Premier Farnell plc in a total cash deal worth approximately £691 million. U.K.-based Premier Farnell is engaged in the distribution of technology products and solutions, particularly engineering solutions to the electronic system design, maintenance and repair communities.
With its business spread across Europe, North America and Asia Pacific regions, the company operates in about 36 countries. The company believes that the acquisition will strengthen digital footprint worldwide.
In our opinion, the acquisition is strategically in sync with Avnet’s policy of focusing on high growth electronic component business.
Nonetheless, a significant portion of Avnet’s revenues comes from the sale of semiconductors, which is a cyclical industry, characterized by changes in technology and manufacturing capacity as well as subject to significant market upturns and downturns. Intensifying competition from Arrow Electronics Inc. also remains a headwind.
Avnet, Inc. Price and EPS Surprise
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