Arrow Misses Q2 Sales, Earnings Projections

Arrow sales fell 7 percent to $5.15 billion from $5.54 billion in the year-ago quarter. The Englewood, Colo.-based distributor earned $114.4 million, or $1.02 per diluted share, compared to net income of $156.2 million, or $1.33 per diluted share, in the year-ago quarter.

Excluding onetime charges and other items, Arrow would have earned $124.1 million, or $1.11 per share. Analysts had predicted $5.17 billion in sales and $1.13 earnings per share, excluding charges, for Arrow in the second quarter.

After the market opened, Arrow shares were down 13 cents to $34.74.

Mike Long, Arrow's chairman, president and CEO, said in a statement that Arrow saw a "challenging macroeconomic environment that weakened throughout the quarter." He added that Arrow plans to reduce costs by $20 million to "advance the efficiency of our organization."

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Arrow Enterprise Computing Solutions, meanwhile, generated $1.70 billion in sales, a 2 percent increase from the year-ago quarter, in line with the company's expectations, according to Arrow. In the Americas, Arrow ECS sales increased 3 percent.

On a global basis, Arrow ECS experienced a double-digit percentage increase in services, storage and software, which offset a decline in server revenue. During the second quarter, Arrow completed its acquisition of The Altimate Group, which expanded its European business.

Arrow's global components business fell 11 percent to $3.45 billion, according to the company.

For the current quarter, Arrow expects sales between $4.8 billion and $5.2 billion, global components sales between $3.3 billion and $3.5 billion, and ECS sales between $1.5 billion and $1.7 billion. In addition, the distributor expects earnings, excluding charges, of between $1.00 and $1.12 per share.

For the current quarter, analysts are predicting sales of $5.10 billion and net income of $1.12 per share.