Strengthening refresh cycle tempers Avnet revenues

Avnet chairman and CEO Roy Vallee has spoken optimistically of recovery in the technology markets and hailed the strengthening IT refresh cycle as the broadline IT and electronic components distributor posted record sales in the final quarter of its fiscal 2010. "The refresh cycle that has been

Avnet chairman and CEO Roy Vallee has spoken optimistically of recovery in the technology markets and hailed the strengthening IT refresh cycle as the broadline IT and electronic components distributor posted record sales in the final quarter of its fiscal 2010.

"The refresh cycle that has been driving better-than-normal seasonal growth continued this quarter as TS (Avnet Technology Solutions) pro forma revenue grew 10% sequentially and 25% year-over-year," he said.

"The TS EMEA team grew pro forma revenue 8% sequentially and nearly 20% year-over-year while delivering significant improvements in operating income margin," he continued.

ATS made sales of $2.08bn worldwide with EMEA generating revenues of $534.6m, excluding non-dollar exchange rates. Operating income was $62.2m, up from $41.2m this time last year.

ATS said server growth was particularly strong in Q4, with sales up 29% year-on-year.

The coming quarter should see a further boost to sales as Avnet wraps the integration of Bell Microproducts and begins to see sales and profits from its new business unit. Earlier this week ATS said its plans were advancing rapidly and revealed that the Bell Micro name would be consigned to the history books from October 2010.

Across the business as a whole, Avnet posted total sales of $5.21bn (£3.34bn) in the three months to 3 July, up 38.5% on the same period last year.

It also reversed a loss of $30.9m in Q4'09, posting GAAP net profit of $141m.

Meanwhile, full-year sales hit $19.16bn, up 18% on 2009, and net income was $410.4m.

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