Arrow Electronics on Thursday posted double-digit revenue gains in the fourth quarter and full-year 2006, along with increased earnings in both periods.
Fourth-quarter sales for the Melville, N.Y.-based distributor came in at $3.49 billion, up 18 percent from $2.96 billion a year earlier. The company's profit was $128.1 million, or $1.04 per diluted share, compared with $74.4 million, or 60 cents per diluted share, in the year-ago quarter. Financial analysts had forecast quarterly earnings of 73 cents per share on sales of $3.55 billion.
For 2006, Arrow's sales totaled $13.58 billion, a nearly 22 percent rise from $11.16 billion in 2005. The distributor's 2006 earnings were $388.3 million, or $3.16 per diluted share, up from $253.6 million, or $2.09 per diluted share, the year before.
Arrow's Enterprise Computing Solutions division saw its 2006 revenue climb 5 percent, when adjusted for acquisitions, over sales in the previous year.
Paul Reilly, senior vice president and CFO at Arrow, said the company saw good growth in storage, industry-standard servers, security and networking software and services. "We think those areas are really going to be the platform to accelerate our growth going forward," he said. Arrow also saw attachment and renewal rates on services contracts increase.
Earlier this year, Arrow unveiled a $485 million deal to acquire the KeyLink Systems Group distribution arm of solution provider Agilysys. The transaction is expected to close in the next few months.
"KeyLink is a great opportunity for us to further deepen our relationship with great suppliers to get a well-trained and well-experienced sales and marketing team," Reilly said. "And they fit exactly where we want to be, which is focusing on small to medium VARs."
Arrow projected first-quarter sales of $3.525 billion to $3.725 billion and earnings per share of 72 cents to 76 cents.
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