Arrow Electronics reported a sales decline of 22 percent in the second quarter ended July 4, blaming the figure on capital-intensive projects continuing to be more scrutinized.
Arrow earned $21.1 million, or 18 cents per share, on sales of $3.39 billion. The results compare with earnings of $96.2 million, or 79 cents per share, on sales of $4.35 billion in the second quarter last year. Excluding a number of charges, Arrow would have earned $37.2 million, or 31 cents per share. Analysts had been expecting earnings of 29 cents per share, excluding charges.
"This quarter's results were at the high end of our updated expectations, and we delivered on our commitment to radically simplify the business while remaining focused on our long-term goals," said CEO Mike Long in a statement. "We continue to invest in opportunities to enhance our growth and enable us to become a more efficient and productive organization, despite the challenges of a weakening economy."
Arrow's Enterprise Computing Solutions sales declined 19 percent to $1.12 billion, or 24 percent, excluding the acquisition of Logix.
""We remain confident that our strategy of portfolio diversification will continue to provide benefits, as the need for complex technology systems to provide security and storage solutions has not diminished despite the macro headwinds," Long said in a statement.
Arrow expects to reduce costs by $100 million in the second half of the year, primarily in Europe, according to Paul Reilly, executive vice president and CFO.
"We believe these actions are necessary to properly position our company to move forward with our long-term objectives and should result in business simplification and alignment with market opportunities," Reilly said in a statement.
Arrow expects sales of between $3.1 billion and $3.7 billion for the current quarter and earnings per share between 25 cents and 37 cents per share.
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