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Have you looked into how Avnet (AVT) performed internationally during the quarter ending September 2024? Considering the widespread global presence of this distributor of electronic components, examining the trends in international revenues is essential for assessing its financial resilience and prospects for growth.

In today's increasingly interconnected global economy, a company's ability to tap into international markets can be a pivotal factor in shaping its overall financial health and growth trajectory. For investors, understanding a company's reliance on overseas markets has become increasingly crucial, as it offers insights into the company's sustainability of earnings, ability to tap into diverse economic cycles and overall growth potential.

International market involvement serves as insurance against economic downturns at home and enables engagement with economies that are growing more quickly. Still, this move toward diversification is not without its challenges, as it involves navigating through the fluctuations of currencies, geopolitical threats, and the distinctive nature of various markets.

While analyzing AVT's performance for the last quarter, we found some intriguing trends in revenues from its overseas segments that Wall Street analysts commonly model and monitor.

The company's total revenue for the quarter stood at $5.6 billion, declining 11.6% year over year. Now, let's delve into AVT's international revenue breakdown to gain insights into the significance of its operations beyond home turf.

Unveiling Trends in AVT's International Revenues

Of the total revenue, $2.61 billion came from Asia during the last fiscal quarter, accounting for 46.50%. This represented a surprise of +21.28% as analysts had expected the region to contribute $2.15 billion to the total revenue. In comparison, the region contributed $2.29 billion, or 41.15%, and $2.45 billion, or 38.73%, to total revenue in the previous and year-ago quarters, respectively.

EMEA accounted for 29.77% of the company's total revenue during the quarter, translating to $1.67 billion. Revenues from this region represented a surprise of -12.61%, with Wall Street analysts collectively expecting $1.91 billion. When compared to the preceding quarter and the same quarter in the previous year, EMEA contributed $1.92 billion (34.52%) and $2.31 billion (36.43%) to the total revenue, respectively.

Revenue Projections for Overseas Markets

The current fiscal quarter's total revenue for Avnet, as projected by Wall Street analysts, is expected to reach $5.55 billion, reflecting a decline of 10.5% from the same quarter last year. The breakdown of this revenue by foreign region is as follows: Asia is anticipated to contribute 39.6% or $2.2 billion and EMEA 34.7% or $1.92 billion.

For the full year, a total revenue of $22.49 billion is expected for the company, reflecting a decline of 5.4% from the year before. The revenues from Asia and EMEA are expected to make up 39.6% and 34.8% of this total, corresponding to $8.91 billion and $7.83 billion respectively.

Wrapping Up

Avnet's leaning on foreign markets for its revenue stream presents a mix of chances and challenges. Therefore, a vigilant watch on its international revenue movements can greatly aid in projecting the company's future direction.

In a world where international interdependencies and geopolitical conflicts are ever-increasing, Wall Street analysts closely monitor these trends for companies having international presence to adjust their earnings forecasts. Of course, there are several other factors, including a company's standing within its home borders, that influence analysts' earnings forecasts.

We at Zacks strongly focus on the dynamic earnings forecast of companies, given that empirical studies have demonstrated its potent impact on the immediate price movement of stocks. Invariably, there's a positive relationship -- upward earnings predictions often result in an increase in stock prices.

The Zacks Rank, our proprietary stock rating mechanism, demonstrates a notable performance history confirmed through external audits. It effectively utilizes the power of earnings estimate revisions to act as a predictor of a stock's price performance in the near term.

At the moment, Avnet has a Zacks Rank #5 (Strong Sell), signifying that it may underperform the overall market trend in the upcoming period. You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here

Examining the Latest Trends in Avnet's Stock Value

The stock has increased by 0.9% over the past month compared to the 0.4% rise of the Zacks S&P 500 composite. Meanwhile, the Zacks Computer and Technology sector, which includes Avnet, has increased 2.1% during this time frame. Over the past three months, the company's shares have experienced a gain of 3% relative to the S&P 500's 5.5% increase. Throughout this period, the sector overall has witnessed a 5.5% increase.

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Arrow Electronics ARW reported third-quarter 2024 adjusted earnings of $2.38 per share, which beat the Zacks Consensus Estimate by 6.73%. However, the bottom line declined 42.5% year over year due to lower revenues, cyclical headwinds and unfavorable foreign currency exchange rates.

In the third quarter, ARW reported revenues of $6.82 billion, down 14.78% from the year-ago quarter’s level. However, the top line beat the Zacks Consensus Estimate by 1.21%.

Find the latest EPS estimates and surprises on Zacks Earnings Calendar.

Arrow Electronics, Inc. Price, Consensus and EPS Surprise

Arrow Electronics, Inc. price-consensus-eps-surprise-chart | Arrow Electronics, Inc. Quote

Third-Quarter Details

In the third quarter of 2024, Global Component sales decreased 20.8% year over year to $4.9 billion, primarily due to the prolonged semiconductor inventory correction. Region-wise, the segment’s revenues from EMEA declined 35.1%, as well as sales from the Americas and Asia-Pacific regions plunged 12.3% and 15.49%, respectively.

Global Enterprise Computing Solutions (ECS) revenues were $1.87 billion, which increased 6.5% year over year. Region-wise, the segment’s revenues from America and EMEA increased 1.6% and 13.17%, respectively.

The non-GAAP operating income from Global Components and Global ECS was $189 million and $76 million, respectively.

Arrow Electronics’ non-GAAP operating income plunged 43.3% to $215 million in the third quarter of 2024 from the year-ago quarter. The non-GAAP operating margin shrunk 150 basis points to 3.2%.

Balance Sheet and Cash Flow

Arrow Electronics exited the third quarter with cash and cash equivalents of $248 million compared with the previous quarter’s $213 million.

The long-term debt was $2.36 billion, down from $2.48 billion at the end of the previous quarter.

The New York-based electronic component distributor generated $80.55 million in cash from operating activities in the reported quarter.

In the third quarter of 2024, ARW returned $50 million to its shareholders through share repurchases. It has approximately $375 million remaining under its current share repurchase authorization.

Fourth-Quarter 2024 Guidance

For the fourth quarter of 2024, sales are estimated between $6.67 billion and $7.27 billion.

Global Components sales are projected in the band of $4.5 billion and $4.9 billion.

Global ECS sales are anticipated to be between $2.17 billion and $2.37 billion.

Interest expenses are expected to be between $60 million and $65 million. As a result, the company projects non-GAAP earnings per share in the band of $2.48-$2.68.

ARW expects changes in foreign currencies to be immaterial for the fourth-quarter sales and earnings.

Zacks Rank & Stocks to Consider

Currently, Arrow Electronics carries a Zacks Rank #3 (Hold).

Monday.com MNDY, Palo Alto Networks PANW and BlackLine BL are some better-ranked stocks that investors can consider in the broader sector. MNDY and BL each sport a Zacks Rank #1 (Strong Buy), while PANW carries a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Shares of MNDY have gained 56.4% year to date. The company is set to report third-quarter 2024 results on Nov. 11.

Shares of PANW have climbed 22.2% year to date. It is slated to report first-quarter fiscal 2025 results on Nov. 20.

Shares of BL have lost 11.3% year to date. The company is set to report third-quarter 2024 results on Nov. 7.

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Arrow Electronics (ARW) came out with quarterly earnings of $2.38 per share, beating the Zacks Consensus Estimate of $2.23 per share. This compares to earnings of $4.14 per share a year ago. These figures are adjusted for non-recurring items.

This quarterly report represents an earnings surprise of 6.73%. A quarter ago, it was expected that this electronics maker would post earnings of $2.16 per share when it actually produced earnings of $2.78, delivering a surprise of 28.70%.

Over the last four quarters, the company has surpassed consensus EPS estimates four times.

Arrow Electronics, which belongs to the Zacks Electronics - Parts Distribution industry, posted revenues of $6.82 billion for the quarter ended September 2024, surpassing the Zacks Consensus Estimate by 1.21%. This compares to year-ago revenues of $8.01 billion. The company has topped consensus revenue estimates three 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.

Arrow Electronics shares have added about 11.1% since the beginning of the year versus the S&P 500's gain of 21.9%.

What's Next for Arrow Electronics?

While Arrow Electronics has underperformed 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 Arrow Electronics: 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 current fiscal year change in the days ahead. The current consensus EPS estimate is $3.29 on $7.27 billion in revenues for the coming quarter and $10.74 on $27.83 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 bottom 16% 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.

One other stock from the broader Zacks Computer and Technology sector, Gilat Satellite (GILT), is yet to report results for the quarter ended September 2024. The results are expected to be released on November 13.

This satellite broadband communications company is expected to post quarterly earnings of $0.08 per share in its upcoming report, which represents no change from the year-ago quarter. The consensus EPS estimate for the quarter has remained unchanged over the last 30 days.

Gilat Satellite's revenues are expected to be $75.3 million, up 17.8% from the year-ago quarter.

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Avnet AVT reported better-than-expected results for first-quarter fiscal 2025. AVT reported earnings of 92 cents per share for the quarter, which surpassed the Zacks Consensus Estimate of 85 cents.

Quarterly earnings also came way above management’s guidance of 80-90 cents per share. However, the bottom line declined 42.9% year over year due to a decrease in revenues.

AVT’s fiscal first-quarter revenues were $5.6 billion, just above the high end of the company’s guidance of $5.25-$5.55 billion. The figure surpassed the Zacks Consensus Estimate of $5.41 billion. However, on a year-over-year basis, the top line declined 11.6%.

Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.

Avnet’s overall performance in the fiscal first quarter was driven by strong performance in the Asia region, offset by continued weakness in the West and Farnell business segments.

Looking forward, Avnet provided top-line guidance for the fiscal second quarter, which is above the Zacks Consensus Estimate. The company’s better-than-expected fiscal first-quarter performance, along with upbeat sales guidance for the fiscal second quarter, is likely to boost investors’ confidence in AVT stock. Shares of AVT have risen 14.4% year to date, outperforming the Zacks Electronics - Parts Distribution industry’s return of 7.5%.

Avnet, Inc. Price, Consensus and EPS Surprise

Avnet, Inc. price-consensus-eps-surprise-chart | Avnet, Inc. Quote

Avnet’s Q1 Fiscal 2025 Details

The Electronic Components segment’s revenues were down 11.1% year over year but increased 1.3% sequentially to $5.26 billion. Our estimates for the Electronic Components segment’s revenues were pegged at $5.04 billion.

Farnell sales declined 17.6% year over year and 7.5% sequentially to $347.1 million. Our estimates for the Farnell segment’s revenues were pegged at $359 million.

From a regional perspective, on a year-over-year basis, sales increased 6.2% in Asia to $2.61 billion but declined 27.7% in EMEA to $1.67 billion and 15.5% in the Americas to $1.33 billion.

The adjusted operating income came in at $168.9 million, which decreased 35.4% year over year. The operating income for the Electronic Components segment declined 27.8% to $197 million, while that for Farnell’s fell 88.9% to $2 million.

Avnet’s adjusted operating margin shrank 112 bps to 3% from the year-ago quarter. Electronic Components adjusted operating margin contracted 86 bps to 3.8%, while Farnell’s declined 366 bps to 0.5%.

AVT’s Balance Sheet & Cash Flow

As of Sept. 30, 2024, AVT had cash and cash equivalents of $267.5 million compared with $310.9 million reported at the end of the previous quarter.

The long-term debt was $2.43 billion as of Sept. 30, 2024, which remained flat compared with the previous quarter. Avnet generated nearly $106.3 million of cash from operational activities during the fiscal first quarter of fiscal 2025.

In the quarter, AVT repurchased approximately $100 million worth of shares, which represented more than 2% of shares outstanding and returned $28.9 million to shareholders in dividends.

AVT Initiates Q2 Guidance

For the second quarter of fiscal 2025, Avnet anticipates revenues in the range of $5.4-$5.7 billion. The Zacks Consensus Estimate for revenues is pegged at $5.49 billion.

AVT expects non-GAAP earnings in the range of 80-90 cents per share. The consensus mark for the bottom line is pinned at $1.04.

Zacks Rank & Stocks to Consider

Currently, AVT carries a Zacks Rank #3 (Hold) at present.

Arista Networks ANET, AudioEye AEYE and Lyft LYFT are some better-ranked stocks that investors can consider in the broader Zacks Computer & Technology sector.

Arista Networks sports a Zacks Rank #1 (Strong Buy), while AudioEye and Lyft carry a Zacks Rank #2 (Buy) each at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Arista Networks’ shares have gained 68.2% year to date. ANET is set to report its third-quarter 2024 results on Nov. 7.

AudioEye shares have skyrocketed 312.4% year to date. AEYE is set to report its fourth-quarter fiscal 2024 results on Nov. 7.

LYFT shares have lost 8.8% year to date. LYFT is set to report its third-quarter 2024 results on Nov. 6.

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