* Sees second-quarter adjusted earnings of $0.79-$0.89/share
vs est $0.77
* Sees second-quarter revenue of $5.95 bln-$6.65 bln vs est
* Shares up 2 percent
By Sruthi Ramakrishnan
Oct 25 Electronic products distributor Avnet Inc
said it reduced its workforce in its Americas operations
and signaled more job cuts as revenue weakens with customers
holding back on orders.
Avnet, like other technology distributors Arrow Electronics
Inc and Ingram Micro Inc, has been hit by weak
demand for the past few quarters, underscoring a slowdown in
The company, which forecast better-than-expected
second-quarter earnings, said it had cut $90 million in costs as
of Sept. 29, a move that will shore up current-quarter earnings.
Avnet, considered a bellwether for corporate technology
spending, said in August that it would cut costs by between $40
million and $50 million on an annualized basis.
"If we are making cost reductions, it ends up actually
impacting our headcount," Chief Executive Rick Hamada told
Reuters, adding that 70 percent of the company's expenses are
Hamada said the company currently has about 17,000
employees. It had about 19,100 employees, as of June 30.
He said additional reductions were unlikely to match the $90
million in cost reductions already undertaken, but will "very
likely" affect headcount.
The company has two divisions -- one supplies components to
manufacturers and the other distributes products made by
companies such as IBM Corp, Apple Inc and
Hewlett-Packard Co to corporations and resellers.
Avnet forecast adjusted earnings per share of 79 cents to 89
cents for the current quarter on revenue of $5.95 billion to
$6.65 billion. Analysts on average expect earnings of 77 cents
per share on revenue of $6.24 billion, according to Thomson
The company said its first-quarter results were affected in
particular by weak demand in the Americas.
"Key segments of our served markets slowed during the
quarter beyond our initial expectations, leading to a dramatic
impact on our bottom line results as our revenues in the
higher-margin western regions declined double-digit percentages
year over year," Chief Executive Rick Hamada said in a
First-quarter net income fell to $100.3 million, or 70 cents
per share, from $139 million, or 90 cents per share, a year
earlier. Excluding items, the company earned 59 cents per share.
Revenue fell 8.7 percent to $5.87 billion .
Analysts had expected earnings of 58 cents per share on
revenue of $5.89 billion.
Shares of the Phoenix, Arizona-based company were up 2
percent at $28.51 on the New York Stock Exchange on Thursday.