Avnet shares fall 3.4% despite fiscal Q1 profit beat

Avnet (AVT) said Nov. 4 that adjusted earnings of $3.63 per share topped the $2.89 consensus estimate for its fiscal first quarter, and sales of $10.72 billion beat the $9.29 billion estimate.

Shares fell 3.4% in regular trading as of 3:59 p.m. ET, from a regular-session close of $88.73.

The quarter ended Oct. 3, 2026, and ran 14 weeks, one more than a year earlier. The company said the extra week added an estimated $654 million to sales.

Sales rose 82% from $5.90 billion a year earlier. On a GAAP basis, diluted earnings per share were $3.28, up from $0.61.

Here's how the company did:

• Adjusted diluted EPS: $3.63 vs. $2.89 expected, and $0.84 a year earlier
• Revenue: $10.72 billion vs. $9.29 billion expected, and $5.90 billion a year earlier
• Operating income margin: 4.4% vs. 2.4% a year earlier
• Adjusted operating income margin: 4.7% vs. 2.6% a year earlier

Adjusted EPS rose 332% from a year earlier, while adjusted operating income grew to $498.1 million from $150.7 million.

"We began fiscal 2027 by delivering another record quarter, reflecting stronger demand and solid execution across all of our businesses," said Avnet Chief Executive Officer Phil Gallagher.

The company said growth continued across its core verticals, including industrial, aerospace and defense, transportation, and AI and data center applications.

Revenue has risen in each of the last three quarters, from $5.90 billion in the first quarter of fiscal 2026 to $8.30 billion in the fourth quarter, according to its SEC filings.

Segment results

Electronic Components sales rose 84% to $10.13 billion. Its operating margin was 4.8%, up from 2.9% a year earlier.

Farnell sales rose 46% to $583 million, with an operating margin of 10.1%, against 4.3% a year earlier.

By region, Asia contributed $5.12 billion of sales, EMEA $2.74 billion and the Americas $2.86 billion.

Second-quarter guidance

For the second quarter ending Jan. 2, 2027, the company expects sales of $11.1 billion to $11.4 billion, with a midpoint of $11.25 billion.

It expects adjusted diluted earnings per share of $3.90 to $4.10, and GAAP diluted earnings per share of $3.80 to $4.05 after restructuring and other expenses.

The company said the guidance implies sequential sales growth of about 5% at the midpoint, and 12% excluding the extra week of sales in the first quarter.

Cash and capital returns

Net cash used for operating activities was $842.4 million, as inventories rose $2.12 billion.

The company paid $30 million in dividends, at $0.37 per share against $0.35 a year earlier.

Return on working capital reached 25%, up from 19% in the prior quarter and 10% a year earlier.

Restructuring, integration and other expenses totaled $22.9 million.