AVX earnings reflect inventory backlog, weak orders

AVX Corporation
AVX reported weak sales and earnings in its December fiscal quarter due to continuing extended inventory levels and weak orders. (AVX)

The weak market conditions plaguing many component suppliers once again reared their ugly head for AVX Corporation. The company reported net earnings of $47.9 million, or 28 cents per diluted share, on sales of $344.4 million for its fiscal quarter ended December 31, 2019. By contrast, AVX earned $74.3 million, or 44 cents per diluted share, on sales of $442.4 million for the same quarter in 2018.

AVX Chief Executive Officer and President John Sarvis, said in a statement, “We completed the third quarter of our fiscal year with net sales of $344.4 million, down 8.7% compared to the previous quarter and down 22.2% from the same quarter last year, reflecting extended inventory levels in the supply chain for commodity products and continuing weakness in the global market for electronic components. Our global distribution channel activity declined again this quarter as inventories remained extended.”

Sarvis expects conditions to improve. “Overall orders in the industry improved this quarter with a positive book to bill, reflecting some improvement in channel inventories. Our gross profit of $77.8 million, or 22.6%, reflects solid operating performance in tighter market conditions. The economic environment remains suppressed, and uncertainties with respect to international relations and trade regulations, particularly in China, continue to put pressure on the global economy. However, we continue to be optimistic that the evolution of new electronic devices and content will create strong demand for our components and interconnect, sensing and control devices and provide growth opportunities in the long-term.”

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Net income for the nine-month period ended December 31, 2019 was $136.0 million, or 80 cents per diluted share, compared to net income of $202.3 million, or $1.20 per diluted share, for the nine month period ended December 31, 2018. Sales for the nine-month period ended December were $1.1 billion, compared to $1.35 billion a year ago.

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