Avnet, Inc. (NYSE:AVT) Q1 2020 Earnings Conference Call - Final Transcript

Oct 24, 2019 • 04:30 pm ET


Avnet, Inc. (NYSE:AVT) Q1 2020 Earnings Conference Call - Final Transcript


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Please stand by, our presentation will now begin. I would like to turn the floor over to Joe Burke, Senior VP, Treasury and Investor Relations.

Joseph Burke

Thank you, Operator. Earlier this afternoon, Avnet released financial results for the first fiscal quarter of 2020. The release is available on the Investor Relations section of the Company's website. A copy of the slide presentation that will accompany today's remarks can be found via the link in the earnings release as well as on the IR section of Avnet's website.

Lastly, some of the information contained in the news release and on this conference call contain forward-looking statements that involve risks, uncertainties and assumptions that are difficult to predict. Such forward-looking statements are not the guarantee of performance and the Company's actual results could differ materially from those contained in such statements.

Several factors that could cause or contribute to such differences are described in detail in Avnet's most recent Form 10-Q and 10-K and subsequent filings with the SEC. These forward-looking statements speak only as of the date of this presentation, and the company undertakes no obligation to publicly update any forward-looking statements or supply new information regarding the circumstances after the date of this presentation.

Today's call will be led by Bill Amelio, Avnet's CEO and Tom Liguori, Avnet's CFO. Also, Phil Gallagher, Global President, Electronic Components, joins us to participate in the Q&A session.

With that, let me turn the call over to Bill Amelio. Bill?

William J. Amelio

Thank you, Joe, and thanks to everyone for joining us for our first quarter fiscal year 2020 earnings call. This quarter, we delivered sales of $4.6 billion and adjusted EPS of $0.60, which were in line with our guidance. Both macroeconomic headwinds and continuing uncertainty around tariffs impacted sentiments and buying patterns across key geographies and verticals.

As a result, we saw market trends decline in the first quarter of fiscal '20, which was a continuation of some of the patterns that began about nine months ago. No one knows exactly when the market will return to more favorable dynamics. What we do know is that macro data, including the United States Purchasing Manager Index or PMI, hit a 10-year low in September. As you know, a PMI of greater than 50 indicates industrial expansion and changes in PMI are often indicative of year-over-year organic sales growth trends for distributors, in turn, the sales of semiconductor companies.

With PMI data across United States, Europe and China all currently below 50, we are continuing to monitor conditions closely. We think that Brexit and tariff concerns play a key role in the low PMI data across Europe and China. Tom will run through the specifics of our performance by geography during his remarks. But in general, the macroeconomic data are consistent with what we saw in the first quarter and what we're seeing in our geographies as we look into our December quarter.

The Americas is the latest to see slowing. Conversely, the leveling out of sales in