Avnet (AVT) Q4 2024 earnings summary

Executive summary

• Fiscal 2024 revenue was $23.8 billion with diluted EPS of $5.43, despite a softening demand environment and market correction in the second half of the year.

• Q4 sales reached $5.6 billion, down 15% year-over-year but exceeding guidance, with adjusted diluted EPS at $1.22, driven by higher sales, lower interest expense, and a lower tax rate.

• The company maintained strong cash flow, generating $274 million in Q4 and $690 million for the full year, and continued to execute on cost reduction and working capital management initiatives.

• Aerospace and defense end markets showed global growth year-over-year, while other end markets softened.

• Adjusted results exclude restructuring, integration, and other non-recurring items.

Financial highlights

• Q4 sales were $5.6 billion, a 15% year-over-year decrease, with gross margin at 11.6%, down 92 bps year-over-year.

• Adjusted operating income was $193 million, with a 3.5% adjusted operating margin; EC operating margin was 4.1%, Farnell 4%.

• SG&A expenses were $450 million, down 11% year-over-year.

• Interest expense was $64 million, down $11 million year-over-year.

• Inventory was $5.5 billion, down $283 million sequentially.

Outlook and guidance

• Q1 FY25 sales guidance: $5.25–$5.55 billion; diluted EPS: $0.80–$0.90, assuming flat to down 5% sequential sales, with softness in Western regions and near-flat or below-seasonal growth in Asia.

• Operating expenses expected to face headwinds from compensation resets and seasonal stock-based compensation.

• Assumes 90 million average diluted shares, effective tax rate of 21–25%, and stable interest expense.