Arrow Electronics Posts Mixed Q1 Results


Arrow Electronics has reported first-quarter 2013 net income of $77.9 million, or $.72 per share on a diluted basis, compared with $113.6 million, or $1.00 per share during the year-ago quarter. First-quarter sales of $4.85 billion declined 1 percent from sales of $4.89 billion in the prior year.

The results include both the company's semiconductor business as well as its Enterprise Computing Solutions (ECS) group.

When ECS is viewed separately, the results are more positive, according to ECS president Andy Bryant.

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ECS first-quarter sales were reported at $1.66 billion, which is an 8 percent year over year increase. Storage, software and services were all identified as positive factors in the growth.

"This is our 13th consecutive quarter of revenue growth," said Bryant, referring to ECS separately from the remainder of the company. "The IT industry in general is a bit sluggish right now. But we expect our business to continue to grow in the June quarter. We always have a seasonal uptick during the June quarter. I think the server business will continue to be a little sluggish, but when you look at software and things like virtualization and middleware, I see growth. When you look at storage and security, I see growth. So there are pockets of strength in the market, and also pockets of weakness. Overall, it is creating a slow growth environment."

Sales in the Americas were reported to be above normal seasonality, but Europe was weak, commensurate with economic difficulties being experienced in that region.

The company anticipates second-quarter sales between $4.9 billion and $5.3 billion, with global components sales between $3.15 billion and $3.35 billion and global enterprise computing solutions sales between $1.75 billion and $1.95 billion. Earnings per share is currently projected to fall between 95 cents and $1.07 per share.

"A lot of our channel partners who have aligned ourselves in new growth segments are actually doing okay," Bryant added. "I think some of the key partners are taking advantage of the growth that is coming from the cloud and big data, business intelligence and mobility."

Paul Smith, a partner at Datasmith, a Walpole, Mass.-based channel partner, agrees that a rebound is likely to happen.

"People are starting to spend," he said. "We did a massive tech refresh for Professional Office, and we have two more coming up the next 60 days. The smaller customers are refreshing, but I think the bigger guys are still sitting on the sidelines."

Arrow Electronics claims more than 100,000 partnerships among original equipment manufacturers, contract manufacturers and commercial customers in more than 55 countries.

PUBLISHED MAY 1, 2013