Avnet showed 3Q decline, local region not fazed

Avnet reported revenue of US$3.7 billion for the third quarter of its fiscal 2009, a decrease of 16.3 percent from US$4.4 billion reported in the third quarter a year ago.

Net income for the third quarter plummeted to US$18 million, down from US$107.2 million a year earlier and operating profit was down to US$55.5 million, a 67 percent drop from US$166.8 million.

The news was best for Avnet Technology Solutions, for which Avnet reported quarterly sales of US$1.6 billion (down 10.8 percent year-over-year) and operating income of US$42.2 million (up 2 percent from 2008).

Avnet forecasted Technology Solutions sales between US$1.45 billion and US$1.75 billion for its fourth quarter.

Roy Vallee, CEO at Avnet and Rick Hamada, COO and senior vice president at Avnet expressed optimism, especially for the distributor's Technology Solutions (TS) business, which they described as stable.

In an interview with CRN, Costigan of Avnet Technology Solutions APAC, said Avnet Australia, like the rest of the Avnet Asia Pacific team is encouraged by the results.

"While the macroeconomic condition continues to challenge all of us, we are still seeing opportunities for growth," he said.

"The APAC team is focused on ensuring that we accelerate time to market for our business partners and suppliers and we will continue to look at new line cards and technologies as they present themselves."

Costigan said it continues to grow in the region and has just signed an agreement with Sun in China and HP and Sybase in India, Lenovo in Singapore and opened an office in Thailand. 

"We will be looking to further expand our geographical footprint in the region, while at the same time consolidate our existing businesses," he said.

"In essence, the results were in line with our expectations."

The results roll off the back of the distributor's recent agreement to distribute Hitachi Global Storage (GST) hard drives in A/NZ.

"We will be looking to expand this business in FY09, Q4," said Costigan.

"From a Q3 perspective, we saw consistent growth in our enterprise server and storage business, while we are starting to see acceptance of our overall solutions distribution model around our solution practices e.g., networking and security and virtualisation."