Revenue during the quarter went up marginally by 2.70 percent to $4,273.56 million from $4,161.08 million in the previous year period. Gross margin for the quarter expanded 158 basis points over the previous year period to 13.72 percent. Total expenses were 97.09 percent of quarterly revenues, up from 96.73 percent for the same period last year. That has resulted in a contraction of 36 basis points in operating margin to 2.91 percent.

Operating income for the quarter was $124.23 million, compared with $136.12 million in the previous year period.

However, the adjusted operating income for the quarter stood at $164.50 million compared to $152.50 million in the prior year period. At the same time, adjusted operating margin improved 18 basis points in the quarter to 3.85 percent from 3.66 percent in the last year period.

"Our December quarter results validate the benefits of our acquisition of Premier Farnell, which was effective October 17, 2016, as gross profit and adjusted operating margins increased 158 and 18 basis points, respectively, year over year. More importantly, as we integrate Premier Farnell, the team is excited about the opportunities to accelerate revenue growth as their customer base gains access to the engineering resources and supply chain services of Avnet," said Bill Amelio, chief executive officer of Avnet. "During the quarter, we further enhanced our digital platform with the acquisition of Hackster.io, which provides over 200,000 makers a forum to learn how to design, create and program Internet-connected hardware. Our Electronics Marketing business also performed well as organic revenue grew approximately 4% in constant currency when you exclude the impact of Premier Farnell and our decision to exit select high volume supply chain engagements in Asia."

For the third-quarter, Avnet projects revenue to be in the range of $4,300 million to $4,600 million. On an adjusted basis, the company forecasts diluted earnings per share to be in the range of $0.80 to $0.90 for the third-quarter.

The company has spent $864.12 million cash to meet investing activities during the first six months as against cash outgo of $86.27 million in the last year period.

Cash flow from financing activities was $889.70 million for the first six months, up 25,039.81 percent or $886.16 million, when compared with the last year period.

Cash and cash equivalents stood at $1,270.14 million as on Dec. 31, 2016, up 38.65 percent or $354.05 million from $916.09 million on Jan. 02, 2016.

Working capital increases sharply
Avnet has recorded an increase in the working capital over the last year. It stood at $6,267.31 million as at Dec. 31, 2016, up 65.84 percent or $2,488.22 million from $3,779.09 million on Jan. 02, 2016. Current ratio was at 2.30 as on Dec. 31, 2016, up from 1.70 on Jan. 02, 2016.

Cash conversion cycle (CCC) has decreased to 54 days for the quarter from 94 days for the last year period. Days sales outstanding went down to 84 days for the quarter compared with 113 days for the same period last year.

Days inventory outstanding has decreased to 33 days for the quarter compared with 68 days for the previous year period. At the same time, days payable outstanding went down to 63 days for the quarter from 87 for the same period last year.

Debt increases substantially
Avnet, Inc. has witnessed an increase in total debt over the last one year. It stood at $3,629.16 million as on Dec. 31, 2016, up 64.33 percent or $1,420.75 million from $2,208.41 million on Jan. 02, 2016. Total debt was 27.38 percent of total assets as on Dec. 31, 2016, compared with 19.54 percent on Jan. 02, 2016. Debt to equity ratio was at 0.77 as on Dec. 31, 2016, up from 0.47 as on Jan. 02, 2016. Interest coverage ratio deteriorated to 4.64 for the quarter from 6.49 for the same period last year.