Avnet has had a switch of CEOs after slashing expectations for its recently completed fourth fiscal quarter.
Rick Hamada is leaving the firm after more than three decades, with former Lenovo CEO Bill Amelio (pictured above) taking the reins, the distributor announced yesterday.
For the three-month period to 2 July, Avnet had previously been expecting to post sales of $5.95bn to $6.55bn (€5.4bn to €5.9bn). The company has refined that prediction to a total of between $6.15bn and $6.25bn. Furthermore, the US-headquartered giant has dropped its profit projections, with adjusted earnings per share now forecast to come in at $0.80 to $0.86, compared with its April prediction of $0.95 to $1.05.
In a press release Avnet explained that its quarterly numbers were "impacted primarily by an ERP implementation in the Americas region" for its Electronics Marketing components business. The firm's Q4 revenue was hit to the tune of about $100m, while profits were stymied as its Americas business "incurred higher costs in order to maintain customer deliveries".
The press release added: "While the impact to sales was minimal by the end of the June quarter, some of the higher costs incurred are expected to continue and will likely impact the first fiscal quarter [which ends on] 1 October."
The new fiscal year will be overseen by incoming CEO Amelio, who has been appointed on an interim basis. Former boss Hamada (pictured below) - who has held the top job since July 2011 - has relinquished both his executive post and his position on the board, bringing to an end a 32-year spell with Avnet.
"I look forward to working with the management team and all of Avnet's talented employees worldwide as we strive to achieve profitable growth for shareholders and operational excellence for customers while enhancing the company's winning culture to the benefit of employees," said Amelio.
The new CEO was already a member of Avnet's boardroom set-up, and has previously held high-level posts with IBM, Dell, and Lenovo - whom he served as chief executive between 2005 and 2009. His most recent posting was as CEO of Singporean telco OMGtel.
William Schumann, chairman of Avnet's board, paid tribute to both the new chief's credentials and the outgoing leader's service to the distributor.
"Bill's extensive experience in international business operations, corporate leadership and management will help steer the company toward success in a rapidly changing industry. His proven expertise will be critical in accelerating Avnet's growth, driving an enhanced execution focus and implementing management systems to promote greater accountability," said Schumann. "On behalf of the Board, I want to thank Rick for his service and the many important contributions he has made during his 32 years with Avnet. We wish him the best in his future endeavours."
Avnet has endured a tough FY16, with sizeable annual revenue contractions in both the second and third quarters. In the latter case the distributor pointed to an "increasing rate of decline in [sales of] certain legacy technologies". This slowdown prompted the firm to announce the commencement of a $25m cost-cutting programme.
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