Upbeat Avnet warns of European weakness

Strong quarter marred by continuing softness in European enterprise business

Roy Vallee: Demand in EMEA remained relatively weak

Global distributor Avnet has warned of lingering weak market conditions in EMEA, despite posting a 28.5 per cent sales surge in the third quarter.

Chief executive Roy Vallee said the pace of recovery remained strong during the firm’s three months to 3 April.

Quarterly revenue increased by 28.5 per cent year on year to $4.76bn (£3.12bn), or 25.5 per cent with currency effects stripped out.

The bottom line did even better as adjusted operating income boomed 98 per cent to $174.6m.

“The pace of recovery in our served markets remained strong this quarter as our year-over-year growth rates accelerated and revenue exceeded expectations at both operating groups for the third consecutive quarter,” said Vallee.

It was Avnet’s components-focused Electronics Marketing unit that grew the fastest, with revenues up by 38 per cent annually to $2.89bn.

Avnet Technology Solutions - which specialises in enterprise computing products, software and storage - posted more modest growth of 16.6 per cent to log quarterly sales of $1.87bn.

Technology Solutions revenue grew just 2.5 per cent to $531m in Europe, with local currency sales down 4.1 per cent.

Vallee said: “The recovery in IT spending is evident in the Americas and Asia regions while demand in EMEA remained relatively weak.”