Avnet(US:AVT)2024-05-02 22:26Financial Performance - For Q3 2024, Avnet reported sales of $5.65 billion, a decrease of $861 million or 13.2% compared to $6.51 billion in Q3 2023[87]. - Adjusted operating income for Q3 2024 was $202.7 million, down from $314.5 million in Q3 2023, reflecting a decline of 35.5%[82]. - Gross profit for Q3 2024 was $669 million, a decrease of $143 million or 17.6% year-over-year[89]. - The gross profit margin decreased by 62 basis points to 11.8% in Q3 2024 compared to 12.5% in Q3 2023[90]. - Operating income for Q3 fiscal 2024 was $190.2 million, a decrease of $123.5 million or 39.4% year over year, with an operating income margin of 3.4%[97]. - Year-to-date operating income for the first nine months of fiscal 2024 was $680.2 million, down $223.0 million or 24.7% from the same period in fiscal 2023[97]. - Net income for Q3 fiscal 2024 was $88.8 million, or $0.97 per share, compared to $187.4 million, or $2.03 per share, in Q3 fiscal 2023[104]. Sales and Market Trends - For the first nine months of fiscal 2024, sales were $18.19 billion, a decrease of $1.79 billion or 9.0% compared to $19.98 billion in the same period of fiscal 2023[87]. - EC sales in Q3 2024 were $5.25 billion, down $813.9 million or 13.4% from Q3 2023, driven by market downturns[88]. - Farnell sales for Q3 2024 were $407.8 million, reflecting a decrease of $47.2 million or 10.4% year-over-year[88]. Expenses and Costs - SG&A expenses decreased by $30.9 million or 6.2% in Q3 2024 compared to Q3 2023, but as a percentage of sales, they increased to 8.3% from 7.6%[91][92]. - Restructuring, integration, and other expenses in Q3 2024 totaled $11.8 million, with an after-tax impact of $9.1 million or $0.10 per diluted share[94]. - Interest and other financing expenses in Q3 fiscal 2024 were $73.5 million, an increase of $1.8 million compared to Q3 fiscal 2023, and $218.6 million for the first nine months, up $42.8 million year over year[99]. - The Company had other expenses of $14.7 million in Q3 fiscal 2024, compared to other income of $1.7 million in Q3 fiscal 2023, primarily due to foreign currency translation losses[101]. Cash Flow and Debt - Net cash provided by operating activities was $499 million for Q3 fiscal 2024, and $415.7 million for the first nine months, a significant increase from a net cash used of $948.2 million in the same period last year[105]. - The Company repaid $106.3 million in debt during the first nine months of fiscal 2024, contrasting with $1.43 billion of net borrowing in the same period of the prior year[106]. - Cash and cash equivalents as of March 30, 2024, were $218.5 million, down from $288.2 million as of July 1, 2023[111]. Future Outlook - The company expects Q4 2024 sales to be 3% to 8% lower than Q3 2024 sales, which will negatively impact operating income and diluted earnings per share[84]. Taxation - The effective tax rate for Q3 fiscal 2024 was 12.9%, down from 23.1% in Q3 fiscal 2023, primarily due to a mix of income in lower tax foreign jurisdictions[103]. Legal and Other Gains - The Company recorded a gain on legal settlements of $86.5 million in the first nine months of fiscal 2024, compared to $61.7 million in the same period of fiscal 2023[102].