AVT

Avnet’s second quarter results were met with a strong positive market reaction, reflecting broad-based improvements across its core businesses. Management attributed the performance to a combination of strengthening demand in both its Electronic Components and Farnell divisions, expanded operating leverage, and tight expense discipline. CEO Philip Gallagher noted that the company saw “improving demand across all of our core markets,” highlighting that growth was not confined to a single sector but was instead widespread. The team emphasized execution on inventory management and the ability to support customers through a more complex demand environment as instrumental to the quarter’s outcome. Is now the time to buy AVT? Find out in our full research report (it’s free). Revenue: $8.30 billion vs analyst estimates of $7.51 billion (47.7% year-on-year growth, 10.5% beat) Adjusted EPS: $2.28 vs analyst estimates of $1.77 (28.8% beat) Revenue Guidance for Q3 CY2026 is $9.15 billion at the midpoint, above analyst estimates of $7.71 billion Adjusted EPS guidance for Q3 CY2026 is $2.85 at the midpoint, above analyst estimates of $1.91 Operating Margin: 3.8%, in line with the same quarter last year Market Capitalization: $7.87 billion While we enjoy listening to the management’s commentary, our favorite part of earnings calls is the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention. Joseph Quatrochi (Wells Fargo) questioned the impact of memory pricing on results and outlook. CEO Philip Gallagher and CFO Ken Jacobson clarified that about one-third of sales and gross profit growth came from memory price increases, but future guidance assumes only modest further price appreciation. William Stein (Truist Securities) asked about Avnet’s position within the industry cycle and prospects for margin expansion. Gallagher described the cycle as still in early innings and Jacobson projected steady progress toward higher margins, especially as Western markets strengthen. Ruplu Bhattacharya (Bank of America) probed the outsized growth in Americas and the drivers behind it. Gallagher explained that growth was broad-based across verticals, particularly industrial and aerospace/defense, not just memory or data center. Melissa Fairbanks (Raymond James) inquired about the sustainability of Farnell’s improved margins and the structural changes supporting them. Gallagher noted ongoing investments in onboard components and digital capabilities, which should support higher margins beyond the current demand cycle. Melissa Fairbanks (Raymond James) also asked about inventory trends in transportation and automotive. Gallagher and Jacobson reported healthy inventory positioning and ongoing conversations with transportation customers to ensure robust supply chain support without causing excess stock buildup. In the coming quarters, the StockStory analyst team will watch (1) Avnet’s ability to maintain margin gains as pricing pressure and supply chain complexity continue, (2) the pace of demand growth in industrial, data center, and AI-related markets, and (3) progress toward double-digit margins at Farnell. Additional focus will be on inventory management and signs of potential customer over-ordering or supply-demand imbalances. Avnet currently trades at $96.23, up from $92.53 just before the earnings. Is the company at an inflection point that warrants a buy or sell? See for yourself in our full research report (it’s free for active Edge members). ONE MORE THING: Top 6 Stocks for This Week. This market is separating quality stocks from expensive ones fast. AI is taking down whole sectors with no warning. In a rotation this fast, you need more than a list of good companies. Our AI system flagged Palantir before it ran 1,662% between October 2022 and February 2026. AppLovin before it ran 753% between February 2024 and February 2026. Nvidia before it ran 1,178% between January 2023 and February 2026. Each week it produces 6 new names that pass the same tests. Get Our Top 6 Stocks for Free HERE. Stocks that have made our list include now familiar names such as Nvidia (+1,460% between June 2020 and June 2025) as well as under-the-radar businesses like the once-small-cap company Comfort Systems (+1,154% between June 2020 and June 2025). Find your next big winner with StockStory today.

Image source: The Motley Fool. Wednesday, Aug. 5, 2026 at 12:00 p.m. ET Director of Investor Relations - Lisa Mueller Chief Executive Officer - Philip Gallagher Chief Financial Officer - Ken Jacobson Operator: Welcome to the Avnet Fourth Quarter Fiscal Year 2026 Earnings Call. I would now like to turn the floor over to Lisa Mueller, Director of Investor Relations for Avnet. Please go ahead. Lisa Mueller: Thank you, operator. I'd like to welcome everyone to Avnet's Fourth Quarter Fiscal Year 2026 Earnings Conference Call. This morning, Avnet released financial results for the fourth quarter of fiscal year 2026, and the release is available on the Investor Relations section of Avnet's website, along with a slide presentation, which you may access at your convenience. As a reminder, some of the information contained in the news release and on this conference call contain forward-looking statements that involve risks, uncertainties and assumptions that are difficult to predict. Such forward-looking statements are not a guarantee of performance, and the company's actual results could differ materially from those contained in such statements. Several factors that could cause or contribute to such differences are described in detail in Avnet's most recent Form 10-Q and 10-K and subsequent filings with the SEC. These forward-looking statements speak only as of the date of this presentation, and the company undertakes no obligation to publicly update any forward-looking statements or supply new information regarding the circumstances after the date of this presentation. Please note, unless otherwise stated, all results provided will be non-GAAP measures. The full non-GAAP to GAAP reconciliation can be found in the press release issued today as well as in the appendix slides of today's presentation and posted on the Investor Relations website. Today's call will be led by Phil Gallagher, Avnet's CEO; and Ken Jacobson, Avnet's CFO. With that, let me turn the call over to Phil Gallagher. Phil? Philip Gallagher: Thank you, Lisa, and thank you, everyone, for joining us on our fourth quarter and fiscal year 2026 earnings call. I'm very pleased to report an exceptional finish to fiscal 2026. The fourth quarter results that came in well above our expectations and capped a year of strong performance and meaningful progress for Avnet. We delivered a record quarter across all key metrics in both our Electronic Components and Farnell businesses, supported by improving demand across all of our core markets, strong execution by our teams and expanded margins from the operating leverage inherent in our business model. For the full fiscal year, Avnet delivered substantial revenue, margin and earnings growth as market conditions improved and our team remained focused on execution in the areas we can control. Looking back, fiscal 2026 was a year when many of the indicators we have been discussing for several quarters began to translate into stronger results. Book-to-bills improved, backlog grew, customer demand visibility and ordering patterns strengthened, lead times extended in most product categories and demand creation activity remained healthy. Just as important, we stayed disciplined on working capital, operating expenses and capital allocation while continuing to invest in the capabilities that differentiate Avnet in the market. Throughout the year, we continue to demonstrate the value we bring at the center of the technology supply chain. We strengthened supplier relationships, supported customers through a more complex demand environment and expanded our technical and digital capabilities. We also ensured that we are well positioned to participate in several end markets that are demonstrating high growth potential or already showing high growth in electronic components demand. I want to thank our employees around the world for their hard work and commitment. These results reflect the experience, resilience and dedication of our team. Now turning to the recently completed fourth quarter. It was a record quarter for Avnet that exceeded our sales and EPS guidance. We achieved record sales of $8.3 billion and an adjusted operating margin of 3.8%, highlighted by an Electronic Components operating margin of 4% and a 9% operating margin at Farnell. We also improved inventory days to 71, the lowest level in nearly 4 years and believe we have the capacity to continue improving in fiscal 2027. The sales improvement we saw was broad-based. We are excited not only by the magnitude of the growth, but the breadth of the recovery across all regions and end markets. This gives us confidence that the improvement in demand is not tied to a single end market or trend, but reflects a broader demand recovery across the diverse applications that require electronic components. The supply environment continued to tighten during the quarter, with lead times moving higher across most of the component categories we track for both semiconductor, Interconnect, Passives & Electromechanical or IP&E products. What initially appeared to be demand concentrated around AI and data center-related deployments has broadened considerably with extended lead times now evident across a wider range of applications and end markets. As the quarter progressed, pricing increases became more prevalent beyond memory. We expect additional price increases from a number of semiconductor and IP&E suppliers in the months ahead. Artificial intelligence continues to be an important catalyst for the industry and for Avnet, but we believe the improving demand environment is broader than AI alone. While we benefit from sales into data center applications and technologies that support AI infrastructure, we are also seeing positive effects across our diversified end markets. Investments being made to support AI are accelerating demand for power management, connectivity, automation and other enabling technologies across a wide range of applications. That impact is increasing semiconductor and component content across the broader markets we serve. We also see new demand from customers that are deploying AI at the edge. These customers are in our industrial sweet spot, which we are well positioned to serve. Robotics, drones and autonomous systems are still in the early stages of adoption, but each application requires a combination of sensing, connectivity, embedded computing, power and thermal management. These are areas where our supplier line card engineering resources, global scale and supply chain expertise create meaningful value. Now with that, let me turn to the highlights for our businesses. Our Electronic Components business delivered another record sales quarter. All 3 regions grew double digits year-over-year and sequentially. Sales growth was the highest in the Americas, marking its fourth consecutive quarter of year-on-year growth. All end markets showed sequential growth. Year-on-year, aerospace and defense, networking and data center were the strongest end markets. In Asia, sales reached another record high of $3.9 billion, marking our eighth consecutive quarter of year-on-year sales growth in the region. Similar to last quarter, demand increased across all the geographies and end markets we serve, led by data center, transportation, networking and industrial. In EMEA, sales grew both sequentially and year-on-year for the third consecutive quarter. We are seeing improvement with a mix of higher-performing end markets such as data center and industrial alongside markets with a somewhat slower growth like transportation. We continue to see positive signs, including improved book-to-bills and our expectation is that the region will see continued growth in the second half of calendar year 2026. Within Europe, we also continue to see steady improvement in our embedded business, which creates tighter customer relationships and better margins. Customers continue to see the value-embedded boards and displays bring as a part of our total solutions offering, helping them solve for their product design requirements. Now turning to Farnell. We were pleased with the continued progress in the business. Farnell benefited from improving demand, continued execution against its strategy and the benefits of leveraging Farnell's digital platform and high service distribution model within Avnet's global relationships and scale. Our PowerOne initiatives continue to create opportunities for both organizations, and we are excited by Farnell's trajectory as market conditions improve, particularly in Europe. This quarter demonstrated that our model is designed to generate significant profit expansion as we grow the top line. We delivered meaningful margin expansion and earnings growth while managing our operating expenses. We still have ample capacity in our sales, engineering, digital and distribution infrastructure, and that capacity becomes more valuable as demand improves and market conditions tighten. Our higher-margin IP&E business is another example of how we benefit from complexity and the fourth quarter was another record quarter for IP&E sales. For the full fiscal year, IP&E sales are approaching $5 billion. As AI infrastructure, industrial automation, robotics, drones and edge applications expand, customers need more complete technology solutions. Our ability to bring semiconductor and IP&E products together through demand creation, technical support supply chain expertise is an important part of our value proposition. Our Supply Chain Solutions business continues to build momentum as large OEM customers increasingly turn to us to help navigate complex and evolving supply chains. We are expanding our engagements with a growing number of leading OEMs, particularly in markets such as data center infrastructure, networking and transportation, where demand trends remain favorable. The strength of our capabilities was recently recognized by General Motors, which named Avnet a 2025 Creative Supplier of the Year, recognizing our relationship, innovation and supply chain support. This award reinforces the value we bring to customers through our global reach, deep industry expertise and ability to deliver creative supply chain solutions. Another good example of the differentiated capabilities within our company is Avnet Integrated Solutions, which helps customers bring complete technology solutions to market by providing system assembly, rack integration, configuration, testing and deployment services globally. One of its larger customers sells directly into the data center market, and we support that growth through a combination of technology solutions, physical integration, supply chain coordination and fulfillment capabilities. While this is only one example, it highlights how Avnet creates value beyond traditional component distribution and participates in high-growth areas where complexity is increasing. As I reflect on fiscal 2026, I am proud of what our team accomplished, but I'm also mindful that success in our industry is earned every day. It is earned through reliability, execution, technical expertise and trusted relationships. That responsibility is something we take very seriously. It is also why I believe our culture matters so much. We have experienced teams who understand the market, stay close to customers and suppliers and move quickly when conditions change. That consistency is a real advantage for Avnet. Looking ahead, we remain optimistic about the ground. Market conditions and demand trends continue to improve. Our book-to-bill in all regions are solidly above 1. Our backlog is healthy and extending, giving us better visibility well into fiscal year 2027. And our diversified go-to-market strategies, end markets and supplier technologies ensure we are well positioned to benefit from the many of the long-term growth trends shaping the electronics industry. At the center of the technology supply chain, Avnet has never been more relevant. Our capabilities, relationships and global reach position us to support customers and suppliers as demand strengthens across the markets we serve. We are proud of the progress we made in fiscal 2026 and are focused on continuing to execute with discipline as we move into fiscal year 2027. With that, I'll turn it over to Ken to dive deeper into our fourth quarter results. Ken? Ken Jacobson: Thank you, Phil, and good morning, everyone. We appreciate your interest in Avnet. Our sales for the fourth quarter were a record $8.3 billion, above the high end of our guidance range and up 48% year-over-year. On a sequential basis, sales were higher by 17%. Foreign currency did not have a meaningful impact on our sales growth this quarter. Regionally, on a year-over-year basis, sales increased 55% in the Americas, 46% in Asia and 44% in EMEA. During the fourth quarter, sales from Asia were 47% of total sales compared to approximately 48% of sales in the year ago quarter. From an operating group perspective, Electronic Components had record sales during the quarter as sales increased 49% year-over-year and increased 17% sequentially. Farnell also had record sales during the quarter as sales increased 29% year-over-year and 10% sequentially. Similar to last quarter, memory prices increased during the quarter. As a result, approximately 1/3 of both the sequential and year-over-year sales growth was attributable to pricing increases in the memory product category. For the fourth quarter, gross profit dollars grew at approximately the same rate as sales growth or 46% year-over-year. Gross profit margin of 10.4% was up 5 basis points sequentially and was down 14 basis points year-over-year. Electronic Components gross profit margin was flat sequentially and down 25 basis points year-over-year. Farnell gross profit margin was up nearly 400 basis points year-over-year and was up over 200 basis points sequentially, primarily due to a better mix of higher-margin one board components. SG&A expenses were $548 million in the quarter, up $96 million year-over-year and $29 million sequentially. The sequential increase in SG&A is primarily from higher incentive compensation, freight and logistics costs due to higher sales volumes. Our expense discipline continues to drive our operating leverage. As a percentage of gross profit dollars, SG&A expenses were 63% in the fourth quarter compared to 70% last quarter and 76% a year ago. SG&A expense as a percentage of gross profit dollars was even lower for our EC business at 56% compared to 62% last quarter and 68% a year ago. We expect that our SG&A expenses as a percentage of gross profit will continue to improve to below 60% before the end of fiscal 2027. For the fourth quarter, we reported adjusted operating income of $318 million, and the Avnet adjusted operating margin was 3.8%, an increase of over 70 basis points from last quarter. This represents the fourth consecutive quarter of adjusted operating income margin expansion. Adjusted operating income also grew approximately 2.6x greater than sales compared to last quarter and last year. We expect to continue to drive operating income growth at approximately twice the rate of sales growth, supported by our disciplined expense management. By operating group, Electronic Components operating income was $317 million, and EC operating margin was 4.1% in the fourth quarter. The 54 basis point sequential increase in EC operating margin was led by the Americas with all regions improving their operating margin sequentially and year-over-year. This is EC's third consecutive quarter of operating margin expansion and is the highest EC operating margin in more than 2 years. Farnell operating income was $45 million, and the operating income margin was 9%, which was up nearly 400 basis points from last quarter. This is the highest Farnell operating margin in over 3 years and is our seventh consecutive quarter of operating margin expansion. Farnell continues to be on track to reach double-digit operating margins before the end of fiscal 2027. Turning to expenses below operating income. Fourth quarter interest expense was $66 million, and our adjusted effective income tax rate was 23%, both consistent with expectations. Adjusted diluted earnings per share of $2.28 was a quarterly record for our company and was well above the high end of our guidance. Adjusted diluted earnings per share grew 3.8x greater than sales compared to last year and grew 3.3x greater than sales compared to last quarter. Near term, we expect EPS to continue growing at approximately 3x as fast as sales, driven by sales growth and expanded operating margins. Turning to the balance sheet and liquidity. During the quarter, working capital increased $559 million sequentially, primarily due to an increase in accounts receivable, driven by the $1.2 billion growth in sales. Working capital days decreased 7 days quarter-over-quarter to 69 days. From an inventory perspective, inventory days improved to 71 days from 77 days last quarter. Our EC inventory days improved to below 65 days and Farnell inventory days improved to below 200 days. We expect inventory days to continue to improve for EC, but we expect Farnell inventory to remain around 200 days, reflecting the business' typical inventory turn profile of 2 turns per year. Inventory dollars grew 11% or $600 million. Similar to the impact pricing had on sales, more than 50% of the inventory increase was driven by pricing and substantially all of that was memory related. Inventory net of accounts payable decreased by $821 million compared to last quarter. Inventory remains a fundamental driver of our business. We will continue to focus on making necessary inventory investments to position us to capture the growth opportunities we see in the markets we serve. We ended the quarter with a return on working capital of 19%, exceeding our near-term target of 16%. Continually improving our return on working capital remain a key priority for us coming into the new fiscal year. In the fourth quarter, we used $291 million of cash flow from operations to support $1.2 billion of sequential sales growth. We anticipate using cash in the first quarter to continue supporting the sales growth, primarily in the form of accounts receivable. With regards to our capital allocation, in the near term, we expect to prioritize funding our accelerating growth and supporting our dividend. Cash used for capital expenditures was $17 million during the quarter. We are making progress towards our leverage target of approximately 3x, which we expect to achieve by the end of the calendar year. We ended the fourth quarter with a gross leverage of 3.2x, down from 3.6x in the third quarter and with approximately $1.2 billion of available committed borrowing capacity. For the fiscal year, we returned $138 million to shareholders from share repurchases, representing 3.2% of shares outstanding. We also returned $114 million to shareholders in dividends, including $29 million for the quarter. Turning to first quarter guidance. We're guiding sales in the range of $9 billion to $9.3 billion and adjusted diluted earnings per share in the range of $2.80 to $2.90. Our first quarter guidance assumes current market conditions persist and implies a sequential sales increase of approximately 10% at the midpoint. This guidance also assumes similar interest expense compared to the previous quarter, an effective tax rate of between 21% and 25% and 85 million shares outstanding on a diluted basis. I want to thank our team for driving a solid quarter and fiscal year of improved financial results. We have great momentum coming into the new fiscal year, and we continue to position ourselves to be able to capitalize on the growth opportunities ahead and to continue to achieve new records for both sales as well as earnings in the coming quarters. With that, I will turn it over to the operator to open it up for questions. Operator? Operator: [Operator Instructions] Our first question is from Joe Quatrochi with Wells Fargo. Joseph Quatrochi: I was wondering if you could just talk a little bit more about the pricing dynamics that you're seeing. What's kind of embedded in the guide from a memory pricing change perspective? And then on the reported results, can you help us just understand what was the impact on the memory pricing from an EBIT perspective on a sequential year-over-year basis relative to, I think you said it was about 1/3 of the revenue growth? Philip Gallagher: Yes. Thanks, Joe. I'll start and then turn it over to Ken for some of the percentage as well. So thanks. Well, as a general statement, even outside of memory, we're starting to see a broader expansion of price increases across other commodities. So we mentioned that last quarter is the lead times continue to extend or forecasted to extend, we'll start seeing some ASP inflation. And it's pretty broad, not across the board everywhere, but it's pretty broad. And then the question of does it impact our margins or impact our GP dollars. A lot of times we pass the pricing through to the customer. We don't typically market up beyond that price increase. So we get some ASP upside and maybe some GP dollar upside, but not necessarily in the percent, if you will. But to date, most of it has really been in memory. But starting this quarter -- in the last quarter, this quarter, it will start to hit other areas. And then there's other parts of the portfolio, Joe, I remember it that are still price negotiations got some deflation there, too. So it's not all inflation. So there is some deflation happening as well. Ken, do you want to... Ken Jacobson: Yes. I would say just to what Phil said, I think we would see that there's other price increases happening or being announced, but they're much more modest than what we saw in memory. I would say then the guide assumes modest or minor price increases going into next quarter. We'll continue to monitor the situation and give clarity there. From a how much did the impact EBIT or operating income, we would say about 1/3 of that GP dollar growth also came from pricing. So there wasn't any meaningful difference between the sales impact and the GP dollar impact. And I think just in general, I think our operating income dollars or GP dollars dropped through about 2.6x. So think about it as the operating leverage benefited not only from the volume growth, but also from the pricing and roughly the same mix as that we saw in the GP dollars. Joseph Quatrochi: Okay. And then maybe -- I think I heard you say greater than 50% of the increase in inventory was more or less related to kind of pricing of the inventory or pricing of the mix. Can you talk about just like the unit increase of inventory? And then how do we think about the unit increase of inventory as we start to look into fiscal '27 or into the September quarter? Ken Jacobson: Yes, that's right. About half of the increase came from pricing, specifically memory. And again, some of that's just timing differences, right, in terms of when we got product and things of that nature. I think, in general, you're going to need more units to support the higher volumes, but we're turning it faster. So I think our commentary was you'd expect to continue to see some improvement, at least in the EC business on inventory days as we continue to increase our working capital velocity. But I think the inventory is as healthy as it's been, no real problems in terms of even some of the stuff that was kind of excess is kind of freed up. So we're in really good shape, I think, from a quality of inventory and continue to see things get tighter, right? So as things get tighter, we want to make sure we've got inventory on the shelves to take advantage of that opportunity as lead times extend. Philip Gallagher: Joe, just additional color. We work with all of our customers in the forecasting as well as obviously balancing that with our suppliers' needs and bounce that back and forth. So from a unit standpoint, we're in good shape from an inventory standpoint, to Ken's point, the inventory is healthy. But we're constantly meeting with our suppliers to be sure we got the right positioning of their inventory of the top runners as well, and we track it with many suppliers in the weeks of inventory, okay? So we're still investing in inventory. I think the matter is very critical and working that balance with the suppliers. And I do know in Farnell, where we said inventory days improved as well, the SKU count actually year-on-year is up somewhere around 2% to 3%. So we continue to add inventory there. It just might be a different mix and broader, which is what we want for the high service business. Operator: Our next question is from William Stein with Truist Securities. William Stein: Congrats on the very good results and the huge guidance you're providing. Phil, I'm hoping you can talk to us a little bit about sort of the positioning in the cycle, right? You just posted revenue up, I don't know, about 34% year-over-year. It's the fourth quarter of year-over-year growth. What inning would you say we're in? Philip Gallagher: Thanks, Will, for the comments, first off. It's tough on the call. We're going to fourth quarter, actually almost 50% year-on-year this quarter. It was 34% last quarter growth. And by the way, for Asia, it's 8 quarters, Will, which is extended already, right, and still looking very bright. So it's tough to call. I'd say we're -- you talk to, but for most part or customers, it feels like maybe in the third or fourth inning, maybe something along those lines, if I was going to put it in baseball terms. For sure, not the eighth inning. So I probably say it's front third of the baseball game, third, fourth inning -- that's sort of -- that's analogy. So exactly what, but I think it gives you a little bit of what we're seeing from a backlog bookings, et cetera. It just -- it seems like it's going to last for a little while. William Stein: Okay. Maybe the other thing I'd like to look at is the margin performance. I think you explained why gross margins -- I mean, they were up sequentially, but maybe a little bit disappointing considering the magnitude of the upside, why that wouldn't have sort of flowed through to better results. I think what you said is that price increases have sort of deflationary effect on that. But as we progress through the cycle, where should we anticipate gross and operating margins traveling to and maybe settling out? I think historically, you've talked about a 5% or greater than 5% operating margin target. You're still nowhere near that really. You've gotten close before. How should we think about expansion over the next few quarters? Ken Jacobson: Well, I guess the short answer to your question would be continued steady progress. I think if you look at the past 4 quarters, 30 basis points this quarter was about 60 basis points expansion, specifically on EC. In general, I think we expect to continue to see some modest uptick in Farnell's gross margins as they get a higher mix of on-the-board components. For EC, that answer partially depends on where the growth is coming from. We've seen good progress on operating margin because the West Europe and the Americas has recovered, but Asia is still going really strong. So that regional mix still has an impact on gross margin. So I would temper any expectations for expansion of gross margin on EC, but continued steady progress in that historical range we've seen over the past year. And I think the guidance would imply that progress. Philip Gallagher: But obviously, that's the -- target is continuous improvement towards 5%. And we -- as we've been saying, we need the West to get stronger, and that's starting to happen, which is great. So the Americas, we're seeing improvement in top line and bottom line as well as in Europe, which is really good news. That's our most profitable region. So Europe is definitely rebounded with good backlog and positive book-to-bills as well. And then, of course, as Ken mentioned, Farnell really accelerated to 9% operating margin. They get that to 10%, 11%, 12%, that should happen, and we'll see where it plays out. William Stein: By the way, I want to correct myself. I think you corrected me though, Phil. I was looking at my old model to look at year-over-year growth, you're right, 47% you just posted and maybe the fifth quarter of expansion and you're guiding to even better. So that's great. But I want to see if I can ask one more, please. In December, I think total company revenue growth is typically down a couple of percentage points. I know you're not guiding more than a quarter out. But as we think about where we are in the cycle and as we think about price increases, is it reasonable for us to think December comes in at seasonal above? Or is there any concern that maybe there's double ordering or customers trying to get ahead and that there could be a pause in December? What's your current thinking as to what might drive a variance between typical and this December? Philip Gallagher: Yes. Yes. Thanks, Will. I would never correct you, Will. But first, the word typical is that's what we talk about internally too. It's our typical seasonality and we go back and look at it, it's kind of everything has been somewhat thrown out the door on typical anymore because even that's COVID. But looking at the numbers now, even last year, December quarter was rather strong for us. But you are right, historically, December quarter will be stronger in Asia, weaker in the West and you have a mix issue. But -- so that's first off. So yes -- and just like Chinese New Year last year, Lunar New Year in the March quarter, we grew in Asia Pac for the first time significantly in the March quarter. So this whole historical typical is really tough to call. But as we see it right now, as you look at the -- without guiding, but if we look at the backlog and the book-to-bills and what we're talking to the teams about, December is actually looking pretty healthy, but without giving an exact guide, it's actually looking pretty good. Ken Jacobson: I'd say better than seasonal, but probably not double-digit sequential growth. Philip Gallagher: Yes. Operator: Our next question is from Ruplu Bhattacharya with Bank of America. Ruplu Bhattacharya: Phil, Americas revenue increased 28% sequentially and looks like it was materially faster than EMEA and Asia. Can you talk about like what were some of the factors that drove that regional divergence? And how much came from memory and data center? I mean what -- it just seems that, that region had just outsized kind of growth this quarter. So can you just comment on that? Philip Gallagher: Yes. Sure, Ruplu. Thanks. Yes, so really nice performance in the Americas in all the regions actually. And yes, it did outgrew Asia. But remember, Asia has had 8-plus quarters in a row of year-on-year accelerated growth. So they're kind of going against their own compares a little bit, right? So for the Americas, I think it's 4 quarters now. If you look at it, it's really diverse in the verticals, Ruplu, which is healthy, which is good. So it's actually -- no, it's not a ton of data center. Actually, it's relatively small for us here directly into the data center. We enjoy more of that business in Asia Pac. But even there, it's maybe 10% to 15% of the total business for us at the corporate level, so directly into the data center. But all verticals as I'm looking at, as we're talking, we were up. We saw increase in industrial nicely, by the way. Aerospace was up almost 40%, [ 45% ] year-on-year to aerospace and defense. The comms were up. Compute transportation was even up, which is predominantly automotive and [indiscernible] -- although it's small, we saw an increase in consumer. So just the diversification of the market and really the industrial and defense leading the way from a revenue standpoint and a growth standpoint, which makes sense, unfortunately, in defense with what's going on in the world, we have a strong position there with a dedicated business unit for that vertical. And then industrial, partially getting some acceleration with the data center, right? And we talk about that AI kind of thing. And that ecosystem around the data center and the hyperscaler and the growth there is going to drive growth in the industrial, right, and EMS providers. So cooling, everything that they need to power data centers fall into a lot of our industrial markets where we have a very strong position. So it's no magic. Ken, anything to add... Ken Jacobson: I'd just say there's nothing different, inherently different. Americas benefited from memory pricing just like the rest of the region, but there was nothing inherently different in the Americas versus the other regions in terms of memory. So again, that's helping in the growth rates, but it helped all the other regions as well. Ruplu Bhattacharya: Okay. All right. For my follow-up, Ken, can I ask you to unpack a little bit on the revenue guide for $9 billion to $9.3 billion? I mean, how much is memory pricing? And how much are you factoring in unit volumes? And how sensitive is the outlook to each? Book-to-bill is well above parity you said and lead times are increasing. But I mean, is there evidence that these orders reflect real consumption rather than any precautionary buying? And then we talked about -- you said double ordering is something probably the suppliers look at. But just with all the component costs going up, any danger of any demand disruption. So if you can just kind of help us with what you're embedding into your outlook and risk management for the year kind of, right? Ken Jacobson: Yes. So there's a few questions in there. I'll probably let Phil jump in on a couple of those as well. I guess maybe just to answer your question, our approach for giving guidance hasn't really changed from past quarters. We're taking the roll from the teams and putting some intelligence on it, but it's -- we feel good about the guidance we've provided. And we're shipping a lot more units. Again, the guidance doesn't assume any meaningful price aspects in that guide. So there's some modest price increases, but it's rounding relative to the overall scheme. This is really units and by the way, increased ASP mix, right? So we have higher ASP products that are going through our volumes as well. So that's part of the equation. But again, you mentioned it, backlog is strong, book-to-bill is well above parity and we're seeing volumes move. I would say we are seeing more and more customers, especially large OEMs, trying to build up, let's say, safety stock buffer stocks, things like that. But I think in this environment, it's hard to get a whole of it. We'll use memory as an example. A lot of customers wish to add more, there's not more to be had. So I don't think we feel that there's any excess builds or this is a lot of safety stock. We believe this is getting much closer to true consumption. I guess time will tell there, but there's nothing we see in our indicators that suggest significant buildup of customer inventories. That being said, memory is causing some constraints in terms of getting everything need to build. But I think generally speaking, lead times are up and to the right and inventory is being consumed as it comes in, and that's why we're turning things faster. Phil, any other commentary there? Philip Gallagher: Yes. No, just on the -- so long and short, no, we're not seeing demand disruption at this point. And on the book-to-bill, yes, the book-to-bill is positive as you caught in our script. And then the double booking question just comes up. I think Joe asked that as well. I'm not sure we got to that, so I apologize. You're right, Ruplu. We kind of lean on the suppliers to try to track for the double bookings, right? But we wouldn't see that. We look at the forecast management inflated demand, right, which is part of your question. We try to -- as we manage these MRPs coming in, whether API, EDIs, what have you, trying to put some analytics around it, what's the reality of that -- how real is that forecast? And we look for spikes. If something all of a sudden spikes up, we go back and challenge the customer, do they really need that additional product or not. So the backlog is -- we sanitize as best we possibly can, work with the suppliers as best we possibly can. And the other thing we look at is rates. So we're not seeing anything today as we look at it, abnormal from a cancellation standpoint. And then we roll up -- back to your point, we roll up the forecast from the field, as Ken points out, we have a lot of dialogue, as you can imagine. And then we got analytics that says, okay, what's the analytics say we're going to do. And it's lining up to what we guided. Operator: Our next question is from Melissa Fairbanks with Raymond James. Melissa Dailey Fairbanks: Congratulations on another exceptional quarter. It's pretty clear all of our models were completely wrong and not appreciating the growth rate. So that's a good problem to have. Yes, yes. Phil, I know you have a pile of sheets with data in front of you. And if you could just make that available to us, that would be great. No, just I wanted to kind of dig in on the Farnell improvement. Obviously, we know that's a highly cyclical business. But at the same time, you have been making a lot of structural changes over there, and congratulations to the team for succeeding there. Is there a way to quantify what sustainable margin profile is going to look like versus we've got structural improvement plus end market demand? Is there a way to kind of parse that out? Philip Gallagher: Yes. I don't want to get into the detail on that, but the answer is yes. We're looking at -- we know the high service guys can get some nontraditional demand, right, as we saw the last cycle come into for inventory and whatnot, and then we do get some accelerated ASPs and margin as a company because of that at Farnell, which has any benefits. What we are doing is we're breaking out and where we're having heavy ASP inflation with Farnell, with Rebecca and team and say, okay, what's our performance without that. So we're actually building in the model as there's -- when there is this cycle adjustment, what is the margin model? What do we predict the margin model based on what we saw. So we are modeling that. I don't have the exact numbers on that floor, but it's going to be much higher than what the cycle for was last time. And that's how we're managing. We don't have all the businesses, frankly, but Farnell for sure, because they do get some accelerated growth there. But we're proud of that, the team there as well as we are the rest of the team. That was a nice jump for us for sure. Ken Jacobson: Yes. The other data point, Melissa, just from the memory side, when we talk about that, that's mostly EC commentary that benefiting some from memory, but it's a much smaller percentage of their sales than what we see in the EC. And I would still say we're still probably earlier innings in terms of seeing some of that additional demand coming from shortages and things like that. I still think EC business is kind of fulfilling customers as they need it in pipelining and things like that. So pronounced by seeing some benefit, but likely more as things get tight. Philip Gallagher: Yes. The diversification is interesting, too, Melissa. We are investing quite a bit in onboard components, which by definite semiconductors, IP&E. And that helps the overall margin as well. That tends to run a little bit higher than the test and measurement, although that's a great business for us, it's just the margin is a little bit lower in that space and higher on the board components. So essentially driving that mix. Melissa Dailey Fairbanks: Perfect. I appreciate all that detail. I was kind of curious if you can comment on what you're seeing. I know that you've seen some growth driven by transport, improved demand there. In automotive, we've heard from some of your suppliers recently, including one this morning that was saying the automotive guys, the OEMs are pressuring the Tier 1s to finally start securing more inventory. And I think that this is a little bit of a swing factor from we saw this overcorrection back to just-in-time or extremely lean inventory levels after the supply chain crisis. Maybe now we're starting to realize the demand is still there and the supply is tight. I was wondering if you could comment on what you're seeing there. Philip Gallagher: Yes. So I know exactly what you're talking about. And of course, we talked about General Motors in the script with a nice win there. Look, I'm looking at the -- it's pretty the transportation verticals across the world, we actually saw an increase in all regions in transportation. Now it's coming from a lower year-on-year compare. Even in Europe, we saw it up double digit -- low double digit. Asia, roughly 15%, 20% and here in the U.S. with 25% year-on-year. So there is a swing there. And part of that is just more -- there's also more products being designed in our semiconductor and passive. So content is going up, which we're benefiting from. Not aware of any intentional conversations with any of the transportation guys where just stockpiling inventory or anything along those lines. There have been a few customers that have had those conversations outside the automotive. But I'm not -- if they're happy, I'm not directly involved in those dialogues. So I'll let Ken comment on. Ken Jacobson: I would just say, Melissa, from our Supply Chain Services business perspective, though, we're having lots of conversations in the transportation space about how we can help keep supply chains going. So again, we're not privy to Tier 1 versus the automakers. But clearly, there were some bad outcomes last time around when things got short in the transportation space. And definitely, they're not looking to have that happen again. I think Phil's comment was we don't want a $2 part holding up $100,000 vehicle. Philip Gallagher: And our suppliers going to watch that, too, right? I mean they don't want to overship either into that and cause another issue like we saw last cycle. Melissa Dailey Fairbanks: Yes, I think bad outcomes is an understatement. Philip Gallagher: Yes, right? And a couple of the suppliers that we announced this week talk more about the mass market, which is great for us. Operator: There are no further questions at this time. I would like to hand the floor back over to Phil Gallagher for any closing remarks. Philip Gallagher: Okay. Thank you. And I want to thank everybody for attending today's earnings call. And I look forward to speaking to you again at our first quarter fiscal year 2027 earnings report in November. Have a good rest of the summer. Thank you. Operator: This concludes today's conference. You may disconnect your lines at this time. Thank you again for your participation. Before you buy stock in Avnet, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Avnet wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $403,337!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,334,946!* Now, it’s worth noting Stock Advisor’s total average return is 958% — a market-crushing outperformance compared to 214% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors. See the 10 stocks » *Stock Advisor returns as of August 12, 2026. This article is a transcript of this conference call produced for The Motley Fool. While we strive for our Foolish Best, there may be errors, omissions, or inaccuracies in this transcript. As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. Avnet (AVT) Q4 2026 Earnings Call Transcript was originally published by The Motley Fool

Avnet (AVT) could be a solid addition to your portfolio given a notable revision in the company's earnings estimates. While the stock has been gaining lately, the trend might continue since its earnings outlook is still improving. Analysts' growing optimism on the earnings prospects of this distributor of electronic components is driving estimates higher, which should get reflected in its stock price. After all, empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements. Our stock rating tool -- the Zacks Rank -- is principally built on this insight. The five-grade Zacks Rank system, which ranges from a Zacks Rank #1 (Strong Buy) to a Zacks Rank #5 (Strong Sell), has an impressive externally-audited track record of outperformance, with Zacks #1 Ranked stocks generating an average annual return of +25% since 2008. For Avnet, there has been strong agreement among the covering analysts in raising earnings estimates, which has helped push consensus estimates considerably higher for the next quarter and full year. The chart below shows the evolution of forward 12-month Zacks Consensus EPS estimate: For the current quarter, the company is expected to earn $2.42 per share, which is a change of +188.1% from the year-ago reported number. The Zacks Consensus Estimate for Avnet has increased 72.89% over the last 30 days, as one estimate has gone higher compared to no negative revisions. For the full year, the company is expected to earn $8.50 per share, representing a year-over-year change of +49.9%. In terms of estimate revisions, the trend for the current year also appears quite encouraging for Avnet. Over the past month, one estimate has moved higher compared to no negative revisions, helping the consensus estimate increase 16.44%. Thanks to promising estimate revisions, Avnet currently carries a Zacks Rank #1 (Strong Buy). The Zacks Rank is a tried-and-tested rating tool that helps investors effectively harness the power of earnings estimate revisions and make the right investment decision.You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. Our research shows that stocks with Zacks Rank #1 (Strong Buy) and 2 (Buy) significantly outperform the S&P 500. Investors have been betting on Avnet because of its solid estimate revisions, as evident from the stock's 10.8% gain over the past four weeks. As its earnings growth prospects might push the stock higher, you may consider adding it to your portfolio right away. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Avnet, Inc. (AVT) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Find winning stocks in any market cycle. Join 7 million investors using Simply Wall St's investing ideas for FREE. Avnet (AVT) is in focus after reporting record fourth quarter and full year results, along with guidance that points to higher expected sales and earnings in the coming quarter. See our latest analysis for Avnet. Avnet’s latest earnings beat and upbeat guidance sit alongside a strong run in the stock, with a year to date share price return of 96.19% and a 5 year total shareholder return of 162.57%. This suggests momentum has been building as investors reassess its growth and risk profile. If Avnet’s recent jump has you thinking about where else momentum and structural demand could meet, it may be worth scanning the 56 AI infrastructure stocks Avnet now trades only slightly below the average analyst target and at a premium to one intrinsic estimate, after a near doubling in the share price. This raises the question of where fair value really sits within that range. The most followed Avnet narrative puts fair value at $96, which now sits just below the last close at $96.80. That small gap focuses attention on the assumptions doing the heavy lifting in the model. Read the complete narrative. Curious what has to happen inside Avnet for that fair value to hold up. The narrative leans heavily on a sharp earnings ramp and a very specific margin reset. The real story sits in how those moving parts combine over time. Result: Fair Value of $96 (OVERVALUED) Have a read of the narrative in full and understand what's behind the forecasts. However, Avnet's heavy reliance on Asia and exposure to price competition in cyclical sectors could quickly challenge those bullish margin and growth assumptions if conditions change. Find out about the key risks to this Avnet narrative. While the narrative model suggests Avnet is slightly overvalued at a fair value of $96, the current P/E of 23.7x tells a different story. It sits well below the US Electronic industry average of 32.2x, yet above the peer average of 18.1x and far below the fair ratio of 49.7x. That mix points to both valuation risk and potential upside if the market moves closer to that fair ratio. Which reference point do you trust most right now? See what the numbers say about this price — find out in our valuation breakdown. If the mixed signals on Avnet have you unsure which way to lean, it can be useful to move quickly and stress test the story against independent risk and reward checks. You can start by weighing the 3 key rewards and 4 important warning signs If Avnet has sharpened your focus, do not stop here. Use the Simply Wall Street Screener to spot other opportunities that fit your style and risk tolerance. Target potential value opportunities by checking stocks that appear mispriced on fundamentals through the 51 high quality undervalued stocks Strengthen your income angle by reviewing companies with robust payouts using the 9 dividend fortresses Protect your downside by scanning for companies that show resilient profiles in the 78 resilient stocks with low risk scores This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Companies discussed in this article include AVT. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email [email protected]

Avnet, Inc. AVT framed the electronics recovery as broad-based rather than dependent on memory pricing or artificial intelligence. Management cited stronger bookings, longer lead times and improving demand across regions and end markets. Avnet’s fourth-quarter fiscal 2026 adjusted earnings of $2.28 per share beat the Zacks Consensus Estimate of $1.76. Revenues of $8.30 billion also topped the consensus estimate of $7.45 billion by 11.30%. Avnet, Inc. price-consensus-eps-surprise-chart | Avnet, Inc. Quote Chief financial officer Ken Jacobson guided first-quarter fiscal 2027 sales to $9.0-$9.3 billion and adjusted earnings to $2.80-$2.90 per share. The sales midpoint implies approximately 10% sequential growth. The outlook assumes growth across all Electronic Components regions and Farnell, similar interest expense, a 21-25% tax rate and 85 million diluted shares. Jacobson said pricing contributes only modestly, leaving units and mix as the main drivers. Chief executive officer Phil Gallagher said regional book-to-bill ratios are solidly above 1 and backlog extends well into fiscal 2027. He called December healthy, while Jacobson said it could exceed normal seasonality without double-digit sequential growth. Gallagher said AI remains a catalyst, but improvement now spans industrial, transportation, aerospace and defense, networking, and data center markets. Every Electronic Components region and Farnell grew sequentially and year over year. Avnet also sees edge AI lifting demand for sensing, connectivity, embedded computing, power and thermal management in robotics, drones and autonomous systems. Gallagher linked that opportunity to engineering support and global supply-chain capabilities. The Americas grew fastest, but Gallagher said the advance was not mainly a data center story. Industrial and aerospace and defense led, while transportation and communications also improved. Jacobson said adjusted operating margin reached 3.8%, up 73 basis points sequentially, as adjusted operating income grew roughly 2.6 times sales. SG&A fell to 63% of gross profit from 70% in the prior quarter. Electronic Components operating margin reached 4.1%, its highest in more than two years. Farnell reached 9.0%, its best in more than three years, and remains targeted for double digits before fiscal 2027 ends. Management continues to target progress toward a 5% company operating margin. Jacobson said Electronic Components gross-margin gains depend partly on regional mix as Asia stays strong and the more profitable Western regions recover. Answering a Wells Fargo analyst, Gallagher said non-memory supplier price increases are broadening but remain smaller than memory increases. Avnet generally passes them through without extra markup, supporting gross profit dollars more than margin percentage. Jacobson said memory pricing generated about one-third of both year-over-year and sequential revenue growth, plus roughly one-third of gross-profit-dollar growth. The first-quarter outlook includes only modest pricing. Inventory days improved to 71, including less than 65 for Electronic Components. Jacobson called inventory healthy and said faster turns support investment as lead times extend. More than half of the $600 million inventory increase reflected pricing, substantially all memory. A Truist Securities analyst pressed on cycle timing. Gallagher placed the recovery around the third or fourth inning based on bookings, backlog and customer discussions, rather than near a late-cycle peak. A Bank of America analyst asked whether orders reflected precautionary buying or consumption. Jacobson said some large customers seek safety stocks, but indicators show no significant inventory accumulation, while supply constraints limit memory availability. Gallagher added that Avnet challenges abrupt forecast spikes, works with suppliers to screen for double bookings and monitors cancellations. Management said those signals align with field forecasts and the guidance range. Management paired confidence in demand with continued working-capital and expense control. Jacobson expects SG&A to fall below 60% of gross profit before fiscal 2027 ends and near-term earnings growth to run about three times sales growth. Capital allocation will prioritize funding accelerating growth and supporting the dividend. Avnet ended the quarter at 3.2 times gross leverage and expects approximately 3 times by calendar year-end while supporting higher receivables and inventory. AVT carries a Zacks Rank #3 (Hold) at present. Its Value Score of A and Momentum Score of B are favorable, while its Growth Score of D is weaker. The VGM Score of B reflects a favorable combined profile. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here. Style Scores complement the Zacks Rank, and a Hold can still carry stronger grades. AVT's setup is balanced rather than uniformly positive. The Zacks Rank can change as analysts revise estimates after the just-reported results. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Avnet, Inc. (AVT) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Avnet, Inc. AVT reported fourth-quarter fiscal 2026 adjusted earnings of $2.28 per share, beating the Zacks Consensus Estimate of $1.76 by 29.55%. The bottom line surged 181.5% year over year. Revenues increased 47.7% year over year to $8.30 billion and surpassed the consensus mark of $7.46 billion by 11.28%. Broad-based regional and end-market demand supported the performance, while inventory days improved to 71 from 77 in the preceding quarter. Avnet beat the Zacks Consensus Estimate for earnings in each of the trailing four quarters, the average surprise being 13.77%. Avnet, Inc. price-consensus-eps-surprise-chart | Avnet, Inc. Quote Electronic Components revenues climbed 49% year over year and 17% sequentially to a record $7.80 billion. The segment benefited from improving demand across regions, stronger customer ordering patterns and healthy demand-creation activity. Farnell revenues rose 29.4% year over year and 10% sequentially to a record $500.1 million. Management highlighted improving demand, execution against Farnell’s strategy and increased use of its digital platform within Avnet’s broader supplier and customer relationships. Americas revenues jumped 55.3% year over year and 27.6% sequentially to $2.06 billion. Growth was diversified across end markets, with aerospace and defense, industrial, communications and transportation contributing to the regional improvement. EMEA revenues rose 43.7% year over year to $2.30 billion, while Asia revenues advanced 46.3% to $3.94 billion. Asia represented 47% of total sales. All end markets delivered double-digit growth both year over year and sequentially, led by data center, networking, aerospace and defense, and industrial demand. Gross margin was 10.4%, up 5 basis points sequentially but down 14 basis points year over year. Electronic Components gross margin was stable sequentially, while Farnell’s gross margin improved nearly 400 basis points year over year, primarily due to a better mix of higher-margin on-board components. Adjusted operating income surged 122.5% year over year and 44.1% sequentially to $317.9 million. Adjusted operating margin expanded 129 basis points year over year and 73 basis points sequentially to 3.8%, reflecting strong operating leverage and disciplined expense management. Electronic Components operating income reached $317 million, while operating margin expanded 107 basis points year over year and 54 basis points sequentially to 4.1%. Improvement in the Americas and Europe supported the segment’s third consecutive quarter of margin expansion. Farnell operating income increased to $45 million, with operating margin expanding 468 basis points year over year and 373 basis points sequentially to 9%. The result marked Farnell’s seventh consecutive quarter of operating margin improvement. Management expects the business to achieve double-digit operating margins before the end of fiscal 2027. Higher memory pricing accounted for approximately one-third of both sequential and year-over-year sales growth. Management noted that pricing similarly contributed about one-third of gross profit dollar growth, though price increases are generally passed through to customers and do not necessarily lift gross margin percentage. Lead times continued to extend across semiconductor and interconnect, passive and electromechanical products. Book-to-bill ratios remained well above parity in all regions, while backlog expanded and provided greater visibility into fiscal 2027. Management said the recovery had broadened beyond artificial intelligence and data center demand into industrial, automation and edge-computing applications. Working capital days declined seven days sequentially to 69, while return on working capital reached 19%, exceeding management’s near-term target of 16%. Inventory totaled $6.07 billion, up $607 million sequentially, with more than half of the increase tied to pricing, primarily in memory. AVT used $291 million in operating cash during the quarter to support $1.2 billion of sequential sales growth. Gross leverage improved to 3.2X from 3.6X in the prior quarter, and the company ended the period with $1.2 billion of available committed borrowing capacity. It returned $29 million to shareholders through dividends. Avnet ended fiscal 2026 with cash and cash equivalents of $155.4 million and long-term debt of $2.48 billion. For the first quarter of fiscal 2027, Avnet expects revenues between $9 billion and $9.30 billion. The midpoint of $9.15 billion implies approximately 10% sequential growth, with sales increases anticipated across all Electronic Components regions and Farnell. Adjusted earnings are projected between $2.80 and $2.90 per share. The outlook assumes interest expense similar to the fourth quarter, an adjusted effective tax rate between 21% and 25%, and approximately 85 million diluted shares outstanding. Avnet currently carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the broader Zacks Computer and Technology sector are Lumentum LITE, Applied Materials AMAT and Analog Devices ADI, each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here. Shares of Lumentum have surged 123% year to date. The Zacks Consensus Estimate for LITE’s fiscal 2026 earnings is pegged at $8.19 per share, up by 5 cents over the past 30 days, indicating an increase of 297.6% year over year. Shares of Applied Materials have jumped 107.9% year to date. The Zacks Consensus Estimate for AMAT’s fiscal 2026 earnings is pegged at $12.14 per share, up by 3 cents over the past 30 days, calling for a rise of 28.9% year over year. Analog Devices shares have rallied 39.2% year to date. The Zacks Consensus Estimate for ADI’s fiscal 2026 earnings is pegged at $12.42 per share, up by 10 cents over the past 30 days, suggesting an increase of 33.9% year over year. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Avnet, Inc. (AVT) : Free Stock Analysis Report Analog Devices, Inc. (ADI) : Free Stock Analysis Report Applied Materials, Inc. (AMAT) : Free Stock Analysis Report Lumentum Holdings Inc. (LITE) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Avnet (AVT) came out with quarterly earnings of $2.28 per share, beating the Zacks Consensus Estimate of $1.76 per share. This compares to earnings of $0.81 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of +29.55%. A quarter ago, it was expected that this distributor of electronic components would post earnings of $1.33 per share when it actually produced earnings of $1.48, delivering a surprise of +11.28%. Over the last four quarters, the company has surpassed consensus EPS estimates four times. Avnet, which belongs to the Zacks Electronics - Parts Distribution industry, posted revenues of $8.3 billion for the quarter ended June 2026, surpassing the Zacks Consensus Estimate by 11.28%. This compares to year-ago revenues of $5.62 billion. The company has topped consensus revenue estimates four times over the last four quarters. The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call. Avnet shares have added about 92.5% since the beginning of the year versus the S&P 500's gain of 13%. While Avnet has outperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock? There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately. Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions. Ahead of this earnings release, the estimate revisions trend for Avnet was mixed. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #3 (Hold) for the stock. So, the shares are expected to perform in line with the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $1.66 on $7.21 billion in revenues for the coming quarter and $7.30 on $28.12 billion in revenues for the current fiscal year. Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Electronics - Parts Distribution is currently in the top 4% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1. Arrow Electronics (ARW), another stock in the same industry, has yet to report results for the quarter ended June 2026. The results are expected to be released on August 6. This electronics maker is expected to post quarterly earnings of $4.45 per share in its upcoming report, which represents a year-over-year change of +83.1%. The consensus EPS estimate for the quarter has remained unchanged over the last 30 days. Arrow Electronics' revenues are expected to be $9.45 billion, up 24.7% from the year-ago quarter. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Avnet, Inc. (AVT) : Free Stock Analysis Report Arrow Electronics, Inc. (ARW) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Our analysts just identified a stock with the potential to be the next Nvidia. Tell us how you invest and we'll show you why it's our #1 pick. Tap here. Achieved record fourth-quarter results driven by broad-based demand recovery across all regions and core end markets, moving beyond initial AI-concentrated growth. Operating leverage inherent in the business model allowed adjusted operating income to grow approximately 2.6x faster than sales compared to the prior year. Supply environment tightened significantly during the quarter, with lead times extending across most semiconductor and IP&E product categories. Pricing increases became more prevalent beyond the memory sector, with management expecting additional hikes from semiconductor and IP&E suppliers in coming months. Strategic focus on high-growth applications like robotics, drones, and edge computing is increasing component content per customer engagement. Farnell's margin expansion to 9% reflects successful execution of digital platform strategies and a shift toward higher-margin on-the-board components. Inventory management improved to 71 days, the lowest level in nearly four years, despite strategic investments to support tightening market conditions. First-quarter guidance assumes current market conditions persist, implying a sequential sales increase of approximately 10% at the midpoint. Management expects earnings per share to continue growing at approximately 3x the rate of sales, supported by continued operating margin expansion. Book-to-bill ratios remain solidly above 1.0 in all regions, providing visibility into healthy demand trends well into fiscal year 2027. Farnell is positioned to reach double-digit operating margins before the end of fiscal 2027 through continued digital platform leverage. Capital allocation will prioritize funding accelerated growth and supporting the dividend, with a target leverage of approximately 3x by the end of the calendar year. Approximately 1/3 of both sequential and year-over-year sales growth was attributable specifically to pricing increases in the memory product category. More than 50% of the sequential inventory increase was driven by pricing, substantially all of which was memory-related. The Americas region saw outsized growth of 55% year-over-year, led by strong performance in aerospace, defense, and industrial verticals. Supply Chain Solutions momentum is building as large OEMs seek to navigate complex supply chains, evidenced by recognition from General Motors as a 2025 Creative Supplier of the Year. One stock. Nvidia-level potential. 30M+ investors trust Moby to find it first. Get the pick. Tap here. Management clarified that price increases are typically passed through to customers without additional markup, meaning they benefit gross profit dollars but not necessarily gross margin percentages. While memory has been the primary driver, price increases are now starting to hit other commodity areas, though some deflation still exists in other parts of the portfolio. CEO Phil Gallagher characterized the current recovery as being in the 'third or fourth inning,' suggesting the growth trend has significant longevity remaining. The recovery is viewed as healthy because it is diversified across verticals rather than being dependent on a single trend like AI. Management is actively sanitizing backlog to look for 'spikes' or inflated demand, but currently sees no evidence of abnormal cancellations or significant customer inventory builds. Inventory turns are increasing, and the company is intentionally keeping 'inventory on the shelves' to capitalize on extending lead times. Reaching the 5% target depends on continued recovery in the higher-margin Western markets (Americas and Europe) to balance the high-volume growth in Asia. Farnell's trajectory toward 10-12% margins is a critical component of the total company margin expansion strategy.

Interested in Avnet, Inc.? Here are five stocks we like better. Record fourth-quarter results: Avnet reported fiscal 2026 Q4 sales of $8.3 billion, up 48% year over year, and adjusted EPS of $2.28. Growth was broad-based across regions and end markets, supported by stronger demand, pricing and operating leverage. Improving business performance: Electronic Components sales rose 49%, while Farnell sales increased 29% and its operating margin expanded to 9%. Demand broadened beyond data centers into power management, connectivity, automation, robotics and edge-AI applications. Positive fiscal 2027 outlook: Avnet forecasts first-quarter sales of $9.0 billion to $9.3 billion and adjusted EPS of $2.80 to $2.90, implying roughly 10% sequential sales growth at the midpoint. Management cited solidly above-one book-to-bill ratios, healthy backlog and expectations for continued market expansion. Bank Earnings Are Roaring, But Wall Street Isn't Ready to Celebrate Avnet (NASDAQ:AVT) reported record fourth-quarter fiscal 2026 sales and adjusted earnings, citing broad-based demand improvement across regions and end markets, higher component pricing and operating leverage. The company also issued first-quarter fiscal 2027 guidance calling for additional sales and earnings growth. Fourth-quarter sales reached a record $8.3 billion, up 48% from a year earlier and 17% sequentially, Chief Financial Officer Ken Jacobson said. Adjusted diluted earnings per share rose to a quarterly record of $2.28, while adjusted operating income totaled $318 million and the adjusted operating margin reached 3.8%. → SpaceX’s First Earnings Report Could Decide Whether Shorts or Bulls Have Control “It was a record quarter for Avnet that exceeded our sales and EPS guidance,” Chief Executive Officer Phil Gallagher said. He said results were supported by improving demand in the company’s core markets, execution by its teams and margin expansion from operating leverage. Sales grew year over year in all three major regions, increasing 55% in the Americas, 46% in Asia and 44% in EMEA. Asia represented 47% of total company sales during the quarter. → 3 Drone Stocks That Should Soar After the Summer Slump Avnet’s Electronic Components business posted record sales, with revenue up 49% year over year and 17% sequentially. All three regions reported double-digit year-over-year and sequential growth in the segment. The Americas recorded its fourth consecutive quarter of year-over-year growth, while Asia reached $3.9 billion in sales and its eighth consecutive quarter of year-over-year growth, Gallagher said. In the Americas, Gallagher said growth was diversified across verticals rather than concentrated in data center activity. Aerospace and defense revenue rose roughly 40% to 45% year over year, while industrial, communications, transportation and consumer markets also increased. In Asia, demand was led by data center, transportation, networking and industrial markets. EMEA posted growth for a third consecutive quarter, aided by data center and industrial demand, though transportation growth was slower. → The Bitcoin Comeback May Already Be Underway—2 ETFs for Exposure Farnell also delivered record sales, which rose 29% year over year and 10% sequentially. Its operating income was $45 million and operating margin reached 9%, up nearly 400 basis points from the prior quarter. Jacobson said this was Farnell’s highest operating margin in more than three years and its seventh consecutive quarter of margin expansion. Farnell’s gross margin rose nearly 400 basis points year over year and more than 200 basis points sequentially, primarily because of a better mix of higher-margin on-the-board components. The company said Farnell remains on track to reach double-digit operating margins before the end of fiscal 2027. Memory pricing accounted for approximately one-third of both the sequential and year-over-year sales growth in the fourth quarter, Jacobson said. He added that pricing increases also contributed about one-third of gross-profit-dollar growth, with no meaningful difference between pricing’s impact on sales and gross profit dollars. Gallagher said price increases were beginning to broaden beyond memory into other semiconductor and interconnect, passive and electromechanical product categories. However, he said the increases outside memory were more modest, and some parts of the portfolio continued to experience price deflation. The company’s first-quarter guidance assumes only modest price increases, Jacobson said, with projected growth driven primarily by unit volumes and a mix of higher average selling price products. Gallagher said supply conditions tightened during the quarter, with lead times extending across most component categories. While AI and data center investment remains an industry catalyst, he said demand has broadened into power management, connectivity, automation and edge-AI applications. He cited robotics, drones and autonomous systems as emerging applications requiring sensing, embedded computing, connectivity, power and thermal-management technologies. Management said it has not seen evidence of material excess customer inventory or abnormal order cancellations. Customers, particularly larger original equipment manufacturers, are seeking to build safety stock in some cases, Jacobson said, but management believes demand is increasingly tied to consumption. Gallagher said Avnet works with suppliers and customers to identify potential double ordering and challenge unusual forecast increases. Gross profit dollars increased 46% year over year, broadly in line with sales growth. Gross margin was 10.4%, up five basis points sequentially but down 14 basis points from the prior-year period. Electronic Components’ operating income was $317 million, and its operating margin was 4.1%, up 54 basis points sequentially. Jacobson said it was the segment’s highest operating margin in more than two years. He expects SG&A expense as a percentage of gross profit dollars to improve to below 60% before the end of fiscal 2027, from 63% in the fourth quarter. Working capital increased $559 million sequentially, largely reflecting higher receivables associated with $1.2 billion of sequential sales growth. Working-capital days declined seven days to 69 days, while inventory days improved to 71 from 77 in the prior quarter. More than half of the $600 million increase in inventory dollars was related to pricing, substantially all of it tied to memory, Jacobson said. Avnet ended the quarter with gross leverage of 3.2 times, down from 3.6 times in the third quarter, and approximately $1.2 billion in available committed borrowing capacity. The company said it expects to reach its leverage target of approximately three times by the end of the calendar year. During fiscal 2026, Avnet returned $138 million through share repurchases and $114 million in dividends. For the first quarter of fiscal 2027, Avnet forecast sales of $9 billion to $9.3 billion and adjusted diluted EPS of $2.80 to $2.90. At the midpoint, the sales outlook implies approximately 10% sequential growth. The forecast assumes current market conditions persist, interest expense similar to the fourth quarter, an adjusted tax rate of 21% to 25% and 85 million diluted shares outstanding. Gallagher said book-to-bill ratios in all regions are “solidly above one,” while backlog is healthy and extending into fiscal 2027. Asked about the stage of the market cycle, Gallagher described the company as likely in the “third or fourth inning,” adding that the environment does not appear to be near its end. He said December-quarter demand was currently looking healthy, potentially better than seasonal patterns, though he did not provide guidance beyond the first quarter. Avnet, Inc (NASDAQ: AVT) is a global technology distributor and solutions provider specializing in the sourcing, design, and supply chain management of electronic components and embedded systems. The company offers a broad portfolio of semiconductors, interconnect, passive and electromechanical components, as well as embedded hardware and software, cloud solutions, and Internet of Things (IoT) services. Avnet's offerings aim to support customers through every stage of the product lifecycle, from initial prototype and design to production and end-of-life management. Founded in 1921 by Charles Avnet, the company has evolved from a regional radio parts supplier into a multinational enterprise. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "Avnet Q4 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for August 2026.