* Q3 adj profit falls 18 pct; Rev down 1.6 pct
* Americas MDD rev falls 3.6 pct, Europe rev down 2.4 pct
* Premier expects cost cuts to help save 4 mln pounds a year
* Shares rise 7 pct
By Monika Shinghal
Dec 6 (Reuters) - British electronic parts distributor Premier Farnell Plc reported a sharp fall in third-quarter adjusted profit, but investors took heart as the company managed to stem a slide in revenue from Europe and the United States.
Shares in Premier Farnell, which sells batteries, computer parts and security products in more than 100 countries, rose as much as 7 percent to 190 pence on Thursday.
Numis Securities analyst Steve Woolf said the rate of revenue decline had eased in a number of regions, and the market took that as a positive sign.
“The conditions in Europe plus the United States, we have reached bottom of the year-on-year declines cycle,” Woolf said.
“So things should improve on year-on-year terms unless we take another macro letdown. This has caused the dramatic jump in the share price at this point.”
Revenue from the company’s marketing and distribution (MDD) business in Europe, excluding the United Kingdom, fell 2.4 percent in the third quarter from a year earlier. Revenue had dropped 5.2 percent in the second quarter.
MDD revenue from the Americas fell 3.6 percent in the latest quarter, compared with a 4.1 percent drop in the preceding quarter.
Sales in the Asia Pacific region rose 8.4 percent in the third quarter, after a 1.6 percent fall in the second quarter.
The MDD business accounts for 92 percent of Premier Farnell’s total revenue.
“It is about investors looking forward to the cyclical upturn,” said Robin Speakman of Shore Capital. “What we are primarily talking about is the revenues in North America and Europe seeing some recovery from the economic downturn that we are currently in.”
Premier Farnell, which began as a radio parts seller in 1939, also said it was cutting costs in the current quarter and expected to save 4 million pounds ($6.4 million) a year.
The cost cuts will save about 800,000 pounds in the year ending February, the company said.
Premier Farnell’s third-quarter adjusted profit fell 18 percent to 17.3 million pounds. Sales fell 1.6 percent to 233.5 million pounds.
MDD revenue fell 2.3 percent due to “less favourable market conditions” in September and October compared with August, when it saw a marginal growth. UK revenue from the business fell 7.3 percent.
Many retailers, particularly in Britain and Europe, are struggling as consumers hold back spending in the face of job insecurity, rising prices, subdued wage growth and government austerity measures.
Revenue from the industrial products division grew 8.1 percent.
In September, rival Electrocomponents Plc warned of a drop in profit this year due to adverse market conditions, prompting it to shift to low-margin products and discount further.
Shares in Premier Farnell were up 6.8 percent at 189.1 pence at 1244 GMT on the London Stock Exchange.