If Avnet's CEO gave his troops a stern talking to following a disappointing fiscal 2013, then they will have breathed a sigh of relief after numbers for the opening three months of the new financial year were filed.
The enterprise distie has reported sales of $6.34bn, up 8.1 per cent year-on-year for the period ended 28 September. Operating profit bounced 79 per cent to $179m and net profit was up by more than a fifth to $120.3m.
More ReadingArrow: global macro still 'unsettled" as profits dipMega-distie Ingram Micro takes knife to costs in 'very challenged' EuropeIngram exec reshuffle leads to exit of UK and Italy veepsDistributing Microsoft gear in UK? You might not be for much longerSales dive at UK's oldest tech wholesaler: PC crash splashes Northamber in red
Chief exec Rick Hamada branded it a "solid" start to financial year 2014, and said operating profits were bolstered by a "disciplined approach to portfolio actions and expense management" taken last year.
Avnet is split into two operating divisions, Technology Solutions (TS) – the enterprise tech wholesaling business – and Electronics Marketing (EM) – the distribution, as the name suggests, of electronic components.
EM saw turnover rise 7.8 per cent to $3.93bn as operating income climbed by close to 18 per cent to $175.8m.
Reported sales at TS grew 8.6 per cent on a year ago to $2.4bn, but organic revenue declined 3.3 per cent in constant currency. Operating profit leaped nearly 70 per cent to $62.6m. Compared to the previous quarter, reported revenues fell 8.1 per cent and organic revenue declined 11.1 per cent.
TS sales were at the lower end of its expected range, said Hamada who added that despite "some challenges in the market" business is on the up as it trades through the December quarter.
Fiscal 2013 ended in August and was a year to forget for Avnet. But it was not alone in the industry as the company's sales dipped one per cent to $25.4bn despite the company spending $262m to acquire 12 firms. Net income fell 20.6 per cent to $450m. ®