Arrow Electronics’ Strong Q3 Points To Record Fiscal 2018

Arrow Electronics was firing on all cylinders in its third fiscal quarter, with sales and earnings per share breaking the electronics components and enterprise solutions distributor's records for the quarter.

Sales and earnings were above market expectations for Centennial, Ohio-based Arrow Electronics, with sales of components and enterprise solutions to its Americas market all showing fast growth.

Arrow Electronics' investment in engineering and working capital are also helping the company stay on pace for a record-breaking full year 2018, said Chairman, President, and CEO Michael Long in a prepared statement.

[Related: Arrow Aims To Aggressively Bolster IoT Business With Acquisition Of eInfochips]

"This quarter we made significant advancements toward future high-growth opportunities in the areas of smart cities, edge computing, and artificial intelligence. These opportunities require all our capabilities across the enterprise to provide complete lifecycle solutions," Long said in the statement.

For its third fiscal quarter 2018, which ended Sept. 29, Arrow Electronics reported revenue of $7.49 billion, an increase of 9 percent from the $6.86 billion it reported in the third quarter of 2017.

This included revenue of $5.38 billion for its global components business, up from last year's $4.86 billion, and $2.11 billion for its global enterprise computing solutions, up from last year's $1.99 billion.

Sales of components to the Arrow Electronics Americas business reached $2.06 billion, up 13.4 percent over last year's $1.82 billion. For the distributor's enterprise computing solutions, sales in the third quarter reached $1.46 billion, up 7.4 percent over last year's $1.36 billion.

The company reported third quarter net income of $177 million, or $1.99 per share, on a GAAP basis, up from the $134 million, or $1.50 per share, it reported last year. On a non-GAAP basis, net income for the third fiscal 2018 quarter $193 million, or $2.18 per share, up from last year's $161 million, or $1.80 per share.

The results beat analysts' expectations. According to Seeking Alpha, the third quarter 2018 revenue beat expectations by $90 million, GAAP earnings per share by 7 cents, and non-GAAP earnings per share by 2 cents.

Looking forward, Arrow Electronics expects fourth fiscal quarter revenue to be between $7.7 billion and $8.1 billion, with global components sales between $5.175 billion and $5.375 billion, and global enterprise computing solutions sales between $2.525 billion and $2.725 billion, the company said. That guidance represents a strong projected growth over fourth quarter 2017 sales of $7.63 billion.

The company also expects full year 2018 sales of about $29.66 billion, up about 12 percent over 2017.

Arrow Electronics also expects earnings in the range of $2.21 to $2.37 per share on a GAAP basis, and $2.46 to $2.62 per share on a non-GAAP basis. That would bring full-year 2018 earnings per share on a non-GAAP basis to about $8.80, or about 17 percent over that of full year 2017.

The stock price for Arrow Electronics closed Thursday up 4.34 percent at $70.65 per share.