Avnet, Inc. (NASDAQ: AVT) stock rose 1.4% on January 25th, 2019 (as of 10:20 am GMT-5; Source: Google finance) after the company posted mixed results for the second quarter of FY 19. Revenues for the fiscal second quarter were up double digits and adjusted quarter earnings per share were up a healthy 33% from a year ago. Avnet continues to show strong operating leverage from the transformation initiatives that they began about two years ago. Defense and aerospace are very healthy and Avnet’s position in that vertical is improving. Industrial demand remains strong and even transportation is doing well. Transportation is an area where unit demand has moderated, but content opportunities continue to increase, which is a growth driver for the company.
Moreover, AVT has laid five strategies. The first is accelerating the core Electronics Components business. In the Americas region, the execution has improved dramatically in recent quarters. Revenues in the second quarter were up nearly 8% from a year ago and the forward indicators show a healthy and stable pipeline. The customer satisfaction in the Americas has improved significantly as evidenced by an increase in the Net Promoter Scores. Importantly, the supplier confidence has been restored, which is opening up new doors for growth and collaboration. Europe remains steady with outstanding performance. The Europe team has delivered year-over-year double-digit revenue growth constant currency and continues to be the most profitable region. In Asia, even though a slowdown has clearly hit the region, the team delivered over $2 billion of revenue, which represents a strong double-digit increase from a year ago.
AVT in the second quarter of FY 19 has reported the adjusted earnings per share of $1.07, beating the analysts’ estimates for the adjusted earnings per share of $1.07. The company had reported the adjusted revenue growth of 11.7 percent to $5.05 billion in the second quarter of FY 19, slightly missing the analysts’ estimates for revenue of $5.07 billion.
During the second quarter of FY 19, AVT has posted 28% rise in the adjusted operating income year over year to $178.8 million. Adjusted operating income margin was 3.5%, up from 3.1% a year ago. The company has returned $197 million to shareholders with $175 million of share repurchases and dividends of $22 million. AVT generated $72 million of cash flow from continuing operations during the second quarter.
Additionally, AVT has expanded Internet of Things (IoT) capabilities with the acquisition of Softweb Solutions