Avnet, Inc. reported a decline in financial performance for the second quarter and first half of fiscal 2025, as detailed in its recent 10-Q filing. The company generated sales of $5.66 billion for the second quarter, a decrease of 8.7% from $6.20 billion in the same period last year. For the first six months, sales totaled $11.27 billion, down 10.2% from $12.54 billion. The gross profit for the second quarter was $596.1 million, reflecting a 15.6% decline year-over-year, while net income fell to $87.3 million, or $0.99 per diluted share, compared to $117.9 million, or $1.28 per diluted share, in the prior year.
The company's operating income also saw a significant drop, decreasing 34.3% to $155.3 million in the second quarter, with an operating income margin of 2.7%, down from 3.8% a year earlier. The decline in profitability was attributed to lower sales volumes and a decrease in gross profit margins across both operating groups, Electronic Components and Farnell. The restructuring efforts initiated in fiscal 2024 continued, resulting in $3.8 million in restructuring expenses for the quarter, primarily related to the Farnell group.
In terms of operational metrics, Avnet's customer base and engagement levels were impacted by the ongoing downturn in the electronic components market, which has seen reduced demand and elevated inventory levels. The Americas and EMEA regions experienced the most significant sales declines, with EMEA sales down 25.1% year-over-year. Conversely, the Asia region reported an increase in sales of 8.4%, indicating some geographic resilience amid broader market challenges.
Looking ahead, Avnet anticipates continued challenges in the electronic components market, projecting a sales decline of 6% to 11% for the third quarter of fiscal 2025 compared to the second quarter. The company is actively managing its inventory levels and working capital to align with the current market conditions. Despite the downturn, Avnet maintains a strong liquidity position, with cash and cash equivalents of $172.1 million as of December 28, 2024, and a commitment to its share repurchase program, which has $515.4 million remaining under authorization.
About AVNET INC
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