Converting the supply chain to Restriction of Hazardous Substances (RoHS) Directive-compliant, non-leaded parts has not hurt the components distribution market, according to Avnet, which reported revenues of $3.61bn for its fiscal Q3, up 31.1 per cent over the year ago quarter’s revenues of $2.76bn.
Avnet’s president of the Electronics Marketing business in the US, Phil Gallagher, characterised the quarter as positive across the board. “Overall we feel very good about the quarter on all fronts. The financial results and the book-to-bill are solid and healthy,” said Gallagher. “We’re feeling we’ve competed well in the market. And every region had a pretty good quarter.” He noted that “Asia is still hot,” while Europe is steady.
Gallagher said that the conversion to RoHS-compliant, non-leaded parts has not put a dent in the components distribution market. He also said he doesn’t expect the RoHS deadline of July to have an impact on Avnet’s present quarter.
“I don’t think RoHS is having a dramatic affect,” said Gallagher. He attributes this to the rolling affect of the RoHS conversion. “I don’t think this is an event like Y2K. It’s going to be a transition,” said Gallagher. “We have a lot of customers who are not even asking for RoHS-compliant parts.”
Last year’s revenues did not include figures from Memec, which the distributor acquired last July. Adjusted for Memec’s revenue contribution, Avnet was up 9.1 per cent over last year.
Net income for the quarter, including certain charges, was $71.2m, or 48 cents per share on a diluted basis, as compared with $41.1m, or 34 cents per share on a diluted basis, for the 2005 quarter. The company’s operating income for the April quarter was $121.9m, including certain charges, up 55.2 per cent compared with 2005’s fiscal Q3 operating income of $78.5m.
The component division, Electronics Marketing, experienced sales of $2.45bn during the quarter, up 53.3 per cent over 2005 and up 8.4 per cent sequentially. The computer division, Technology Solutions, delivered sales of $1.17bn, essentially flat, year-over-year, and down 22.2 per cent sequentially. Company Chairman and CEO Roy Vallee noted that Technology Solutions experienced its seasonally down quarter but was still able to drive improvements in both gross profit and operating income margins on a year-over-year basis.