AVX Corp. :AVX-US: Earnings Analysis: Q3, 2017 By the Numbers : January 25, 2017

AVX Corp. reports financial results for the quarter ended December 31, 2016.


  • Summary numbers: Revenues of USD 340.80 million, Net Earnings of USD 35.52 million.
  • Gross margins widened from 23.02% to 27.07% compared to the same period last year, operating (EBITDA) margins now 18.72% from 15.41%.
  • Earnings growth from operating margin improvements as well as one-time items.

The table below shows the preliminary results and recent trends for key metrics such as revenues and net income growth:

2016-12-31 2016-09-30 2016-06-30 2016-03-31 2015-12-31
Relevant Numbers (Quarterly)
Revenues (mil) 340.8 327.02 315.44 303.61 286.47
Revenue Growth (%YOY) 18.97 7.47 5.16 -3.78 -9.9
Earnings (mil) 35.52 26.52 29.89 32.67 5.37
Earnings Growth (%YOY) 560.94 -4.83 -16.11 -67.83 -86.2
Net Margin (%) 10.42 8.11 9.48 10.76 1.88
EPS 0.21 0.16 0.18 0.19 0.03
Return on Equity (%) 6.48 4.84 5.48 6.05 1
Return on Assets (%) 5.82 4.37 4.95 5.49 0.91

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Market Share Versus Profits

Revenues History
Earnings History

Compared to the same period last year, AVX-US‘s change in revenue was close to the amount of its change in earnings. It remains to be seen how the rest of its peer group’s results will turn out and if AVX-US‘s performance is a sign of any major shift in the composition of market share in this sector. Also, for comparison purposes, revenues changed by 4.21% and earnings by 33.93% compared to the previous period.

Earnings Growth Analysis

The company’s earnings growth was influenced by year-on-year improvement in gross margins from 23.02% to 27.07% as well as better cost controls. As a result, operating margins (EBITDA margins) rose from 15.41% to 18.72% compared to the same period last year. For comparison, gross margins were 22.55% and EBITDA margins were 16.75% in the last reporting period.

Gross Margin Trend

Companies sometimes sacrifice improvements in revenues and margins in order to extend friendlier terms to customers and vendors. Capital Cube probes for such activity by comparing the changes in gross margins with any changes in working capital. If the gross margins improved without a worsening of working capital, it is possible that the company’s performance is a result of truly delivering in the marketplace and not simply an accounting prop-up using the balance sheet.

Gross Margin History
Working Capital Days History

AVX-US‘s improvement in gross margin has been accompanied by an improvement in its balance sheet as well. This suggests that gross margin improvements are likely from operating decisions and not accounting gimmicks. Its working capital days have declined to 428.54 days from 482.02 days for the same period last year.


The company’s earnings growth has also been influenced by the following factors: (1) Improvements in operating (EBIT) margins from 12.12% to 18.72% and (2) one-time items. The company’s pretax margins are now 15.36% compared to -0.21% for the same period last year.

EBIT Margin History
PreTax Margin History

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Company Profile

AVX Corp. operates as a manufacturer and supplier of passive electronic components and related products. It operates through three segments: Passive Components, Kyocera Electronic Devices and Interconnect. The Passive Components segment manufactures multi-layered ceramic and solid tantalum capacitors in many different sizes and configurations. It primarily consists of surface mount and leaded ceramic capacitors, RF thick and thin film components, tantalum capacitors, film capacitors, ceramic and film power capacitors, super capacitors, EMI filters, thick and thin film packages, varistors, thermistors, inductors and resistive products. The Kyocera Electronic Devices Resale segment consists of ceramic capacitors, frequency control devices, SAW devices, sensor products, RF modules, actuators, acoustic devices and connectors produced by Kyocera, and resold by AVX. The Interconnect segment consists primarily of AVX interconnect automotive, telecom, and memory connectors manufactured by AVX. The company was founded in 1972 and is headquartered in Fountain Inn, SC.

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