Avnet AVT reported third-quarter fiscal 2025 earnings of 84 cents per share, beating the Zacks Consensus Estimate by 16.7%. The bottom line, however, declined 23.6% on a year-over-year basis.

Net sales were $5.32 billion, which surpassed the Zacks Consensus Estimate by 0.46%. The figure, however, decreased 6% from the year-ago quarter.

The company experienced declining sales across all its segments, reflecting broader market pressure. The margins were also pressured due to margin contraction across both the Electronic Components and Farnell segments.

Avnet shares lost 8.3% during Wednesday’s trading session as investors were concerned about declining sales and shrinking margins. The stock has lost 2.2% in the past year compared with the Zacks Electronics - Parts Distribution industry’s decline of 0.6%.

Avnet’s Q3 2025 Details

The Electronic Components segment’s revenues were down 5.7% year over year and 6.9% sequentially to $4.95 billion. Our estimate for the Electronic Components segment’s revenues was pegged at $4.96 billion.

Farnell sales declined 10.1% year over year but were up 6.1% sequentially to $366.7 million. Our estimate for the Farnell segment’s revenues was pegged at $351 million.

From a regional perspective, on a year-over-year basis, sales increased 13% in Asia to $2.48 billion but declined 24.1% in EMEA to $1.56 billion and 9.2% in the Americas to $1.27 billion.

The adjusted operating income came in at $152.7 million, which decreased 24.7% year over year. The adjusted operating income for the Electronic Components segment declined 21% to $172 million, while that for Farnell’s fell 33% to $11 million.

Avnet’s adjusted operating margin shrank 70 basis points (bps) to 2.9% from the year-ago quarter. Electronic Components adjusted operating margin contracted 65 bps to 3.5%, while Farnell’s declined 101 bps to 3%.

Balance Sheet & Cash Flow of AVT

As of March 29, 2025, AVT had cash and cash equivalents of $188.9 million compared with $172.1 million reported as of Dec. 28, 2024.

The long-term debt was $2.49 billion as of March 29, 2025, lower than $2.57 billion reported in the previous quarter. Avnet generated $141 million of cash from operating activities during the third quarter of fiscal 2025.

In the fiscal third quarter, Avnet repurchased approximately $101 million worth of shares, representing 2.3% of shares outstanding. AVT returned $28 million to shareholders in dividends.

Avnet Initiates Q4 Guidance

For the fourth quarter of fiscal 2025, Avnet anticipates revenues in the range of $5.15-$5.45 billion (midpoint of $5.30 billion). The Zacks Consensus Estimate for revenues is pegged at $5.29 billion, suggesting a year-over-year decline of 6.41%.

AVT expects non-GAAP earnings in the range of 65-75 cents per share. The consensus mark for the bottom line is pinned at 72 cents, suggesting a year-over-year decline of 34.6%. (Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)

Zacks Rank and Stocks to Consider

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

Affirm AFRM, Super Micro Computer SMCI and Paycom Software PAYC are some better-ranked stocks that investors can consider in the broader Zacks Computer & Technology sector. AFRM, SMCI and PAYC sport a Zacks Rank #1 (Strong Buy) each at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

AFRM shares have gained 4% in the past year. The Zacks Consensus Estimate for AFRM’s 2025 is pegged at a loss of 6 cents per share, narrowed by 7 cents over the past 60 days, suggesting growth of 96.7% from the year-ago quarter’s reported figure.

SMCI shares have plunged 56.4% in the past year. The Zacks Consensus Estimate for SMCI’s fiscal 2025 earnings has been revised downward to $2.52 in the past seven days, suggesting year-over-year growth of 14%.

PAYC shares have gained 6% over the past year. The Zacks Consensus Estimate for PAYC’s 2025 earnings is pegged at $8.72 per share, implying a rise of 6.21% from the year-ago quarter’s levels.

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