UPDATE 2-Avnet sees Q3 profit above Street on hardware upgrades
* Q2 adj EPS $1.07 vs est $1.03
* Revenue $6.77 bln vs est $6.69 bln
* Sees Q3 adj EPS $0.93-$1.01 vs est $0.94
* Sees Q3 rev $5.95-$6.55 bln vs est $6.17 bln (Recasts, add CEO, analysts comments)
By Swati Chitnis
BANGALORE, Jan 27 (Reuters) - Technology distributor Avnet Inc (AVT.N) forecast a strong third-quarter, and said it expects higher growth in 2011 as more businesses upgrade aging hardware and demand for cloud storage increases.
"The number one driver will be the hardware refresh cycle. Throughout 2010 hardware has been growing faster than software and services," Chief Executive Roy Vallee told Reuters.
Avnet also expects that increased use of cloud computing applications will create the need to store that data, resulting in more demand for hardware.
"The word of the hour is Cloud and I expect that there will be increased private Cloud deployment in 2011, which will drive both servers and storage," Vallee said.
European region, which has been lagging Asia and America in the past years, has been a growth driver since June, the company said.
For third quarter, the company forecast total sales of $5.95-$6.55 billion, while sales from electronic components are expected to be $3.55-$3.85 billion.
"IT spending in storage and server will be a key to growth," Stifel Nicolaus & Co analyst Matthew Sheerin said.
The company, which distributes electronic-parts and computer hardware of technology bellwethers IBM (IBM.N), Apple (AAPL.O) and Hewlett-Packard (HPQ.N), expects an adjusted third-quarter profit of 93 cents to $1.01 per share.
Analysts on an average were expecting earnings of 94 cents a share, on revenue of $6.17 billion, according to Thomson Reuters I/B/E/S.
Shares of Phoenix-based Avnet, valued at $5.41 billion, were trading at $35.16 on Thursday on the New York Stock Exchange. They have gained about 18 percent since the company reported first-quarter results late October. (Reporting by Swati Chitnis in Bangalore, Additional reporting by Supantha Mukherjee; Editing by Anne Pallivathuckal, Vyas Mohan)