Arrow's 2Q Computing Sales Increase 23 Percent
Arrow's Enterprise Computing Solutions group servicing VARs saw sales increase 23 percent to $1.66 billion, according to CEO Mike Long. Revenue in Arrow's components group increased 19 percent in the quarter.
"The ECS team posted record second-quarter revenue driven by impressive year-over-year growth in all of our product lines, with proprietary servers, industry-standard servers, and software all growing in excess of 25 percent," Long said in a statement. "We continue to execute on our growth strategy as evidenced by the recent expansion into new markets such as unified communications and expanded supplier relationships."
Overall, the Melville, N.Y.-based distributor earned $156.2 million (or $1.33 per diluted share) on $5.54 billion in sales for the quarter. The results compare to net income of $116.2 million (96 cents per diluted share) on $4.61 billion in the year-ago quarter.
The results included restructuring, debt and other charges that impacted earnings, according to Arrow. Excluding those items, the company would have earned $159.8 million or $1.36 per share. Arrow made Wall Street analysts' expectations for the quarter of earnings of $1.36 per share, excluding charges, but missed sales expectations of $5.73 billion for the second quarter.
For the current quarter, Arrow expects earnings per share between $1.17 and $1.29, excluding charges, on sales between $5.15 billion and $5.55 billion. Analysts' current estimates for Arrow's third quarter are earnings of $1.29 per share on $5.60 billion in sales.
"In the third quarter, we would expect global ECS sales to be in line with the midpoint of normal seasonality. Sales in our core global components business are expected to be in line with the low end of normal seasonality, reflecting an oversupply of inventory in the supply chain at the end of the second quarter and weaker global macroeconomic conditions," said Paul Reilly, executive vice president, finance and operations and CFO, in a statement.
On Tuesday, Arrow said its board had agreed to repurchase up to $100 million in shares from investors after completing a previous buyback of $50 million. Shares of Arrow closed at $37.68 on Tuesday, up 63 cents from the previous day.