Avnet slides on profit warning

Avnet shares tumbled $3.50, or 15 percent, to a 52-week low of $19.19 Tuesday after warning that it will miss analysts' earnings estimates in its second quarter.

On Tuesday, Bear Stearns cut Avnet (NYSE: AVT) from a "buy" recommendation to "attractive."

CEO Roy Vallee told analysts during the firm's annual shareholders meeting Monday that it now expects to post a profit of between 75 cents to 80 cents a share in its second quarter.

First Call Corp. consensus was expecting a profit of 85 cents a share in the quarter.

"The cyclicality of the semiconductor industry is no secret," Vallee said in a prepared release. "It seems that the industry is now experiencing an inventory correction, a result of excess buffer inventories and backlogs that were built up over the last several quarters, triggered by the earlier severe shortages that characterized the industry through our fiscal 2000."

Vallee went on to say that the correction is likely temporary and could correct itself with the next few quarters.

"Because we believe this correction is temporary, our expectations for the second half of fiscal 2001 EPS performance have not changed; however, this will lower the annual EPS consensus estimate of $3.46 by $0.05 or $0.10," he said.

Last quarter, Avnet posted a profit of $75.6 million, or 81 cents a share, on sales of $2.96 billion.

The stock moved up to a 52-week high of $40.63 in April before falling to a 52-week low Tuesday.

Five of the six analysts following the stock maintain either a "buy" or "strong buy" recommendation.