SECURITIES AND EXCHANGE COMMISSION

 Washington, DC 20549

Form 10-Q

X Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended June 30, 2000.

__Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the transition period from __________ to __________

Commission file number 1-10431

(Address of principal executive offices)

(Registrant's phone number)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date.

AVX CORPORATION

INDEX

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 AVX CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS UNAUDITED

(in thousands, except share data)

1. Basis of presentation:

The consolidated financial statements of AVX Corporation and subsidiaries (the "Company" or "AVX") include the accounts of the Company and its subsidiaries. All significant intercompany transactions and accounts have been eliminated. In the opinion of management, the accompanying unaudited financial statements reflect all adjustments (consisting of normal recurring accruals) that are necessary to a fair presentation of the results for the interim periods shown. These financial statements should be read in conjunction with the Company's audited financial statements for the fiscal year ended March 31, 2000.

On April 20, 2000, the Board of Directors approved a 2-for-1 stock split of our common stock effected in the form of a 100% stock dividend. The additional common stock was distributed on June 1, 2000 to holders of record on May 15, 2000. All references in this report to the number of shares, per share amounts, and market prices of the Company's common stock have been restated to reflect the stock split and the resulting increased number of shares outstanding.

  Certain prior year amounts have been reclassified to conform to the current year presentation.

2. Accounts Receivable:

  Accounts receivable consisted of:

3. Inventories:

Inventories consisted of:

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4. Environmental Matters and Contingencies:

The Company has been named as a potentially responsible party in state and federal administrative proceedings seeking contribution for costs associated with the correction and remediation of environmental conditions at various waste disposal sites. Once it becomes probable that the Company will incur costs in connection with remediation of a site and such costs can be reasonably estimated, the Company establishes reserves or adjusts its reserve for its projected share of these costs. Management believes that it has adequate reserves with respect to these matters. Actual costs may vary from these estimated reserves, but such costs are not expected to have a material adverse effect on the Company's financial condition or results of operations.

5. Comprehensive Income:

Statement of Financial Accounting Standards No. 130, Reporting Comprehensive Income ("SFAS No. 130") requires disclosure of total non-shareowner changes in equity on an annual basis. Total non-shareowner changes in equity includes all changes in equity during a period except those resulting from investments by and distributions to shareowners. The specific components include: net income, deferred gains and losses resulting from foreign currency translation and minimum pension liability adjustments.

Comprehensive income for the three months ended June, 30, 1999 and 2000, includes the following components:

The accumulated balance of comprehensive income (loss), (all of which relate to foreign currency translation adjustments) as of June 30, 1999 and 2000 is as follows:

6. Earnings Per Share:

Basic earnings per share are computed by dividing net income by the weighted average number of shares of common stock outstanding for the period which were 172,516,514 and 174,913,628 for the three months ended June 30, 1999 and 2000, respectively.

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Diluted earnings per share has been calculated by dividing net income by the weighted average number of shares of common stock and common stock equivalents outstanding for the period which were 173,125,828 and 176,571,605 for the three months ended June 30, 1999 and 2000, respectively. Stock options are the only common stock equivalents and are therefore considered in the diluted earnings per share calculations. Common stock equivalents are computed using the treasury stock method.

There were no common stock equivalents not included in the computation of diluted earnings per share because the options' exercise prices were less than the average market price of the common shares for the respective periods.

7. Segment information:

The Company has three reportable operating segments: Passive Components, Connectors and Research and Development. The Company is organized, exclusive of research and development, on the basis of products being separated into six units. Five of the units which manufacture or distribute ceramic, tantalum, film and power capacitors, ferrites and other passive devices have been aggregated into the segment "Passive Components".

The Company evaluates performance of its segments based upon sales and operating profit. There are no intersegment revenues. The tables below present information about reported segments for the three months ended June 30,

8. Subsequent Event:

On July 25, 2000, the Company declared a $0.035 dividend per share of common stock with respect to the quarter ended June 30, 2000, payable on August 14, 2000.

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Gross profit in the three months ended June 30, 2000 increased to $212.6 million (35.3% of net sales) from $53.9 million (15.7% of net sales) in the three months ended June 30, 1999. The favorable pricing environment, higher throughput and improvements in our manufacturing process have contributed to the improvement in gross profit in dollar terms and as a percentage of sales. Gross profit was negatively impacted by increases in the cost of palladium, currently a raw material used in the manufacture of certain multi-layer ceramic capacitors. The Company continues its efforts to reduce the amount of the precious metal used in such parts, and substitute base metals, such as nickel, in the production of multi-layer ceramic capacitors.

Selling, general and administrative expenses in the three months ended June 30, 2000 were $35.1 million (5.8% of net sales) compared with $27.5 million (8.0% of net sales) in the three months ended June 30, 1999. The decline in selling, general and administrative expenses, as a percentage of sales, is primarily a result of higher sales, offset in part by higher research and development and administrative costs.

On May 10, 2000, the Company acquired an additional 10% of the outstanding stock of Electro-Chemical Research Ltd. (ECR), bringing its total holding to 51%. ECR has developed and patented a technology for high capacity electrical storage devices. Prior to acquiring the additional 10%, the investment was accounted for using the equity method. Effective May 10, 2000, 100% of ECR's operating and research costs are included in the consolidated results of the Company.

As a result of the above factors, profit from operations in the three months ended June 30, 2000 increased to $177.5 million from $26.4 million in the three months ended June 30, 1999.

For the reasons set forth above, higher interest income on invested cash and a lower income tax rate as a result of the nonrecognition of certain foreign income tax benefits for the quarter ended June 30, 1999, net income in the three months ended June 30, 2000 was $120.4 million (20.0% of net sales) compared to $17.4 million (5.1% of net sales) in the three months ended June 30, 1999.

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The Company's liquidity needs arise primarily from working capital requirements, dividends, capital expenditures and acquisitions. Historically, the Company has satisfied its liquidity requirements through internally generated funds. As of June 30, 2000, the Company had a current ratio of 3.05 to 1, $253.8 million of cash and cash equivalents, $1,102.3 million of stockholders' equity and an insignificant amount of long-term debt.

Net cash from operating activities was $134.3 million in the three months ended June 30, 2000 compared to $33.2 million in the three months ended June 30, 1999.

Purchases of property and equipment were $54.9 million in the three month period ended June 30, 2000 and $24.0 million in the three month period ended June 30, 1999. Expenditures for both periods were primarily for expanding production capabilities of the tantalum and ceramic surface-mount and advanced product lines in North America, Europe and Asia.

Although the majority of the Company's funding is internally generated, certain European subsidiaries of the Company have borrowed German deutsche marks, French francs and Euro loans under various bank agreements.

On May 10, 2000, the Company acquired, for $2.2 million, an additional 10% of the outstanding stock of Electro-Chemical Research Ltd. (ECR), bringing its total holding to 51%.

Based on the financial condition of the Company as of June 30, 2000, the Company believes that cash on hand and expected to be generated from operating activities will be sufficient to satisfy the Company's anticipated financing needs for working capital, capital expenditures, research, development and engineering expenses, and any dividends and acquisition payments to be paid in the foreseeable future.

CAUTIONARY STATEMENT PURSUANT TO SAFE HARBOR PROVISIONS OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995

This report may contain "forward-looking" information within the meaning of the federal securities laws. The forward-looking information may include, among other information, statements concerning the Company's outlook for fiscal 2001, overall volume and pricing trends, cost reduction strategies and their anticipated results, and expectations for research and development and capital expenditures. There may also be other statements of expectations, beliefs, future plans and strategies, anticipated events or trends, and similar expressions concerning matters that are not historical facts. The forward-looking information and statements in this report are subject to risks and uncertainties, including those discussed in the Company's annual report on Form 10-K for year ended March 31, 2000, that could cause actual results to differ materially from those expressed in or implied by the information or statements.

The Company held its Annual Meeting of Stockholders on July 25, 2000 for the purpose of electing four Directors, ratifying a proposed amendment to the AVX Corporation 1995 Stock Option Plan, and ratifying the appointment of independent accountants. Proxies for the meeting were solicited pursuant to Regulation 14A of the Securities Exchange Act of 1934 and there was no solicitation in opposition to management's solicitations.

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Proposal 1:

Election of Class II directors with terms expiring at the Annual Meeting in July of 2003 with the following vote.:

Before effect of the June 1, 2000 stock split.

The following is a summary of directors who were not up for election and continue in office:.

Proposal 2:

Ratification of an amendment to the 1995 Stock Option Plan to increase the number of shares that may be issued under the plan by an additional 1,500,000 (automatically adjusted to an additional 3,000,000 shares in connection with the Stock Split in accordance with the terms and conditions of the 1995 Stock Option Plan) was approved with the following vote.:

Before effect of the June 1, 2000 stock split.

Ratification of appointment of PricewaterhouseCoopers LLP as the Company's independent accountants was approved with the following vote:

Before effect of the June 1, 2000 stock split.

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Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

Date: August 2, 2000

AVX Corporation