Avnet Q4 Earnings Beat Estimates, Stock Falls on Weak Profit Outlook

Avnet, Inc. AVT reported better-than-expected results for the fourth quarter of fiscal 2025. The company’s fourth-quarter earnings of 81 cents per share surpassed the Zacks Consensus Estimate by 12.5%. However, the bottom line declined 33.6% on a year-over-year basis.

Net sales were $5.6 billion, which outpaced the Zacks Consensus Estimate by 4.7%. However, the figure remained flat on a year-over-year basis, as the growth in the Asia region was fully offset by a decline in the Americas and EMEA regions.

Despite reporting better-than-expected results, shares of Avnet declined 4.7% on Wednesday as the company’s EPS guidance for the first quarter of fiscal 2026 fell short of the Zacks Consensus Estimate. The stock has lost 5.5% year to date compared to the Zacks Electronics - Parts Distribution industry’s gain of 7.8%.

Avnet’s Q4 2025 Details

The Electronic Components segment’s revenues were up 1% year over year and 5.7% sequentially to $5.23 billion. Our estimate for the Electronic Components segment’s revenues was pegged at $4.97 billion.

Farnell sales grew 3% year over year and 5.4% sequentially to $387 million. Our estimate for the Farnell segment’s revenues was pegged at $368.2 million.

From a regional perspective, on a year-over-year basis, sales increased 18% in Asia to $2.69 billion but declined 17% in the EMEA to $1.6 billion and 2% in the Americas to $1.33 billion.

The adjusted operating income came in at $143 million, which decreased 26% year over year. The adjusted operating income for the Electronic Components segment declined 25% to $157 million, while that for Farnell’s increased 10% to $17 million.

Avnet’s adjusted operating margin shrank 94 basis points (bps) to 2.5% from the year-ago quarter. Electronic Components’ adjusted operating margin contracted 105 bps to 3%, while Farnell’s improved 25 bps to 4.3%.

Balance Sheet & Cash Flow of Avnet

As of June 28, 2025, AVT had cash and cash equivalents of $192.4 million compared with $188.9 million reported as of March 29, 2025.

The long-term debt was $2.57 billion as of June 28, 2025, lower than $2.49 billion at the end of the previous quarter. Avnet generated $139 million of cash from operating activities during the fourth quarter and $725 million for the full fiscal 2025.

In the fiscal fourth quarter, Avnet repurchased approximately $50 million worth of shares and paid $28 million in dividends. In full-fiscal 2025, it repurchased shares worth $301 million and paid $113 million in dividends.

Avnet Initiates Q1 Guidance

For the first quarter of fiscal 2026, Avnet anticipates revenues in the range of $5.55-$5.85 billion (midpoint of $5.70 billion). The Zacks Consensus Estimate for revenues is pegged at $5.59 billion, suggesting a year-over-year decline of 0.3%.

AVT expects non-GAAP earnings in the range of 75-85 cents per share. The consensus mark for the bottom line is pinned at 98 cents, suggesting a year-over-year increase of 6.5%.

Avnet’s Zacks Rank & Stocks to Consider

Currently, AVT carries a Zacks Rank #4 (Sell).

Some better-ranked stocks that investors can consider in the broader Zacks Computer and Technology sector are Bumble BMBL, Arista Networks ANET and MongoDB MDB. Bumble sports a Zacks Rank #1 (Strong Buy) at present, while Arista Networks and MongoDB each carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for Bumble’s 2025 earnings has been revised upward by a penny to $1.05 per share in the past 30 days, implying a strong improvement from the loss of $4.61 reported in 2024. Bumble shares have declined 17.9% year to date.

The Zacks Consensus Estimate for Arista Networks’ 2025 earnings has been revised downward by a penny to $2.57 per share over the past seven days and suggests a year-over-year increase of 13.2%. Arista Networks shares have rallied 25.7% year to date.

The Zacks Consensus Estimate for MongoDB’s fiscal 2026 earnings has been revised upward by 4 cents to $3.07 per share in the past 60 days, calling for a 16.1% year-over-year decline. MongoDB shares have risen 1.2% year to date.

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This article originally published on Zacks Investment Research (zacks.com).

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