Blames supply correction, economic climate
Avnet said sales fell because of a “supply chain correction” and challenging economic environment.
Sales for the fiscal year ending June 30 were down 3.1 percent from the previous year, reaching $25.7 billion, compared to $26.5 billion for the previous year. Operating income was $958 million.
In sequential terms there was an 8.8 percent decline in sales revenues, dropping to $6 billion from $6.9 billion in the previous quarter, with customers becoming more cautious the mega-distributor said.
“Our fiscal 2012 results reflect the impact of both a components supply chain correction that occurred in the earlier part of the year followed by slowing global economic growth during the latter part of the year,” said Rick Hamada, Chief Executive Officer.
He said that IT spending continued to be affected in many countries due to slackening GDP growth, or in many places recession.
“As a result, we initiated expense reductions in the parts of the portfolio most impacted by these developments,” Hamada said. Translated into Anglo-Saxon English that means cuts.
“These initiatives helped offset the impact of the revenue decline and, for the full fiscal year, we generated $958 million of adjusted operating income and $529 million of cash flow from operations.”
He said that there was optimism that the firm could grow sales over the coming financial year despite the harsh climate.
“With the heightened level of uncertainty around global economic growth, we enter fiscal 2013 poised to execute on our growth strategies yet will continue to manage the portfolio and react quickly to market conditions in order to continue to progress toward our long-term margin and return goals,” said Hamada.