Avnet Q1 Earnings Beat Estimates, Stock Falls on Dim Q2 EPS Guidance

Avnet, Inc. AVT reported better-than-expected results for the first quarter of fiscal 2026. The company’s first-quarter earnings of 84 cents per share surpassed the Zacks Consensus Estimate by 3.7%. However, the bottom line declined 8.7% on a year-over-year basis.

Net sales increased 5.3% year over year to $5.9 billion and outpaced the consensus mark by 3.5%. The year-over-year growth was primarily driven by strong sales across the company’s operating segments.

Despite reporting better-than-expected first-quarter results, shares of Avnet fell 3.8% on Wednesday as the earnings guidance for the second quarter fell short of analysts’ expectations. Year to date, AVT stock has fallen 7.1%, underperforming the Zacks Electronics – Parts Distribution industry’s gain of 11.1%.

Avnet’s Q1 2026 Details

The Electronic Components segment’s revenues were up 4.6% year over year and 5.1% sequentially to $5.5 billion. Our estimate for the Electronic Components segment’s revenues was pegged at $5.34 billion.

Farnell sales soared 14.9% year over year and 3.2% sequentially to $398.9 million. Our estimate for the Farnell segment’s revenues was pegged at $360.4 million.

From a regional perspective, on a year-over-year basis, sales increased 9.9% in Asia to $2.86 billion and 3% in the Americas to $1.37 billion. However, sales in the EMEA declined marginally by 0.1% to $1.67 billion.

The adjusted operating income came in at $150.7 million, which decreased 10.8% year over year. The adjusted operating income for the Electronic Components segment declined 19.5% to $159 million, while that for Farnell’s jumped ninefold to $17.1 million from $1.9 million in the year-ago quarter.

Avnet’s adjusted operating margin shrank 46 basis points (bps) to 2.6% from the year-ago quarter. Electronic Components’ adjusted operating margin contracted 86 bps to 2.9%, while Farnell’s improved 375 bps to 4.3%.

Balance Sheet & Cash Flow of Avnet

As of Sept. 27, 2025, AVT had cash and cash equivalents of $175.5 million compared with $192.4 million reported as of June 28, 2025.

The long-term debt was $2.79 billion as of Sept. 27, 2025, lower than $2.57 billion at the end of the previous quarter. Avnet used $144.6 million of cash for operational activities during the reported quarter.

In the fiscal first quarter, Avnet repurchased approximately $138.3 million worth of shares and paid $28.5 million in dividends.

Avnet Initiates Q2 Guidance

For the second quarter of fiscal 2026, Avnet anticipates revenues in the range of $5.85-$6.15 billion (midpoint of $6 billion). The Zacks Consensus Estimate for revenues is pegged at $5.77 billion, suggesting a year-over-year increase of 1.8%.

AVT expects non-GAAP earnings between 90 cents and $1 per share. The consensus mark for the bottom line is pinned at $1.01, suggesting a year-over-year increase of 16.1%.

Avnet’s Zacks Rank & Stocks to Consider

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

Impinj PI, Credo Technology Group CRDO and Amphenol APH are some better-ranked stocks that investors can consider in the Zacks Computer and Technology sector. Impinj, Credo Technology Group and Amphenol each sport a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for Impinj’s full-year 2025 earnings is pegged at $1.98 per share, revised upward by 4 cents over the past 30 days and suggests a year-over-year decline of 6.2%. Impinj shares have soared 46.7% year to date.

The Zacks Consensus Estimate for Credo Technology Group’s fiscal 2026 earnings has been revised upward by a cent over the past 30 days to $2.04 per share, implying an increase of 191.4% year over year. Credo Technology Group shares have surged 155.2% year to date.

The Zacks Consensus Estimate for Amphenol’s full-year 2025 earnings has moved upward to $3.22 per share from $3.03 per share in the past seven days, calling for 70.4% year-over-year growth. Amphenol shares have risen 101.3% year to date.

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

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