More bad news for the PC segment of the chip market.
Avnet Cuts Estimates for Profit
And Cites Slowing Chip Orders
By a Wall Street Journal Staff Reporter
NEW YORK -- In another sign of weakening semiconductor demand, electronic-parts distributor Avnet Inc. warned analysts that slow orders have forced it to reduce by as much as 10% its earnings projections for the current quarter.
During the company's annual shareholder meeting in New York, Chairman and Chief Executive Roy Vallee said the semiconductor industry is in the midst of an "inventory correction," reflected in canceled orders and "lower incoming order rates" for various components.
While Mr. Vallee said Avnet officials "tend to believe this is only a midcourse correction," he noted that if the trend continues, "meeting our expectations for the current quarter will be more difficult than we believed just a short time ago."
For the fiscal second quarter, Avnet, Phoenix, expects to earn between 75 and 80 cents per share, compared with the 85 cents a share the company previously projected. Avnet had net income of $32.7 million, or 79 cents a diluted share, a year earlier.
Mr. Vallee said the downturn in orders "could correct itself within a quarter or two," adding that its previous earnings projections for the second half of the current fiscal year haven't changed. Officials couldn't be reached to elaborate.
At 4 p.m. in New York Stock Exchange composite trading Monday, Avnet shares were down $4.75, or 17%, to $22.69, a new 52-week low. |
