It has been about a month since the last earnings report for Avnet (AVT). Shares have added about 5.4% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Avnet due for a pullback? Well, first let's take a quick look at the most recent earnings report in order to get a better handle on the recent drivers for Avnet, Inc. before we dive into how investors and analysts have reacted as of late.
Avnet's Q2 Earnings and Revenues Beat Estimates
Avnet reported better-than-expected results for the second quarter of fiscal 2026. The company’s second-quarter adjusted earnings of $1.05 per share surpassed the Zacks Consensus Estimate by 10.53%. Moreover, the bottom line surged 20.7% on a year-over-year basis.
Net sales increased 11.6% year over year to $6.32 billion and outpaced the consensus mark by 5.28%. The year-over-year growth was primarily driven by strong sales across the company’s operating segments.
Avnet’s Q2 2025 Details
The Electronic Components segment’s revenues were up 10.8% year over year and 7.1% sequentially to $5.89 billion. Our estimate for the Electronic Components segment’s revenues was pegged at $5.6 billion.
Farnell sales soared 23.6% year over year and 7.1% sequentially to $427.1 million. Our estimate for the Farnell segment’s revenues was pegged at $400.8 million.
From a regional perspective, on a year-over-year basis, sales increased 16.9% in Asia to $3.17 billion and 4.9% in the Americas to $1.44 billion. Sales in the EMEA jumped 8.3% to $1.71 billion.
The adjusted operating income came in at $171.7 million, which increased 7.7% year over year. The operating income for the Electronic Components segment rose 3% to $187.1 million, while that for Farnell’s jumped fivefold to $20 million from $3.5 million in the year-ago quarter.
Avnet’s adjusted operating margin shrank 10 basis points (bps) to 2.7% from the year-ago quarter. Electronic Components’ operating margin contracted 20 bps to 3.2%, while Farnell’s improved 370 bps to 4.7%.
AVT’s Balance Sheet & Cash Flow
As of Dec. 27, 2025, AVT had cash and cash equivalents of $286.5 million compared with $175.5 million reported as of Sept. 27, 2025.
The long-term debt was $2.47 billion as of Dec. 27, 2025, lower than $2.79 billion at the end of the previous quarter.
Avnet generated operating cash flow of $208 million in the second quarter and $63.7 million in the first half of fiscal 2026. In the second quarter, the company did not repurchase its shares but paid $28 million in dividends to shareholders. In the first half of fiscal 2026, it repurchased shares worth $138.3 million and paid $56.9 million in dividends.
Avnet Initiates Q3 Guidance
For the third quarter of fiscal 2026, Avnet anticipates revenues in the range of $6.2-$6.5 billion (midpoint of $6.35 billion). AVT expects non-GAAP earnings between $1.20 and $1.30 per share.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision have trended upward during the past month.
The consensus estimate has shifted 8.72% due to these changes.
VGM Scores
Currently, Avnet has a great Growth Score of A, though it is lagging a bit on the Momentum Score front with a B. Charting a somewhat similar path, the stock has a score of A on the value side, putting it in the top quintile for value investors.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. Notably, Avnet has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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Avnet, Inc. (AVT): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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