Arrow Electronics Inc. executed well in a global environment that continues to challenge the electronics supply chain, said Arrow CEO Mike Long. Arrow’s sales for Q3 2013 increased 2 percent year over year to $5.05 billion. Excluding certain items, Arrow’s net income for the period remained flat at $119.3 million.
“We again produced excellent results in the third quarter, with revenue and adjusted earnings per share growing 2 percent and 8 percent, respectively, year over year. In a global macro environment that remains unsettled, we continue to execute well,” said Long in a release, “striking the right balance between maximizing our performance in the short term and investing in our long term strategy. In addition to growing the business and expanding margins, we invested in acquisitions that will accelerate our growth.”
Global components third-quarter sales of $3.47 billion increased 3 percent year over year and were in line with expectations, the company reported. Sales, as adjusted, increased 1 percent year over year. In the Americas, sales increased 2 percent year over year. European sales, as adjusted, advanced 4 percent year over year. Sales in the Asia-Pacific region were essentially flat year over year. Global components operating income, as adjusted, grew 6 percent year over year to $169.1 million.
Arrow said it expects to see normal seasonality in the fourth quarter of 2013. Component makers during this reporting period have been warning analysts that Q4 will be soft – a departure from what traditionally is a seasonal uptick in Q4. “In the fourth quarter, we believe that total sales will be between $5.6 billion and $6.0 billion, with global components sales between $3.2 billion and $3.4 billion and global enterprise computing solutions sales between $2.4 billion and $2.6 billion,” said Paul J. Reilly, executive vice president, finance and operations, and chief financial officer. “We expect earnings per share, on a diluted basis, excluding any charges to be in the range of $1.56 to $1.68. Our guidance includes the impact of our recent Computerlinks acquisition, which closed on October 28th, 2013, assumes an average tax rate in the range of 27 to 29 percent, average diluted shares outstanding are expected to be 102.5 million, and the average USD to Euro exchange rate for the fourth quarter is 1.37 to 1,” said Reilly.
Global ECS third-quarter sales of $1.58 billion decreased 1 percent year over year. Sales, as adjusted, declined 2 percent year over year. In the Americas, sales growth was 3 percent year over year. In Europe, sales, as adjusted, decreased 14 percent year over year. The company noted that both regions were affected by the quarter end cut off, which was earlier than some of their suppliers. Global ECS operating income, as adjusted, grew 7 percent year over year to $63.7 million.
In addition to growing revenue and earnings, Arrow Electronics Inc. generated $81 million in cash flow from operations during the quarter, said Reilly. “With $423 million of cash flow from operations on a trailing twelve month basis, we again surpassed our targeted goals.”