Arrow’s Q3 Financials Flat Not Fat
November 4, 2013 Dan Burger
Arrow Electronics, known to the IBM i community because of its Enterprise Computing Solutions (ECS) group that moves a ton of IBM gear, delivered its third quarter financial report that puts the overall company revenue at $5 billion. The ECS group contributed $1.6 billion to that amount. In addition to being a top IBM reseller, Arrow ECS also resells products for fifty of the largest IT companies in the world.
The overall company revenue showed no gain in revenue compared to the same quarter in 2012. The same was true for the ECS group.
Company executives provided some details on the ECS revenue, saying in the report that its storage, services, and software business in North American increased and overall revenue in the region increased 3 percent. However, the economic slump in Europe resulted in less than expected results, dropping revenue from that region 14 percent.
Adjusted Global ECS operating income grew 7 percent year-over-year to $63.7 million.
In terms of operating income, Arrow Electronics could not quite match Q3 a year ago as the number dipped from $164 million to $163 million. The comparison of net income was not even that close as it slid from $104 million to $97 million.
Michael Long, chairman, chief executive officer, and president of Arrow, claimed “excellent results” in Q3, noting that 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,” he said in a prepared statement. “In addition to growing the business and expanding margins, we invested in acquisitions that will accelerate our growth.”
Expectations for normal Q4 performance were issued by Paul Reilly, Arrow’s chief financial officer. “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. Our guidance includes the impact of our recent Computerlinks acquisition, which closed on October 28, 2013.”
In July, the company’s board of directors authorized the repurchase of up to an additional $200 million of common stock through a share repurchase program. The company has spent approximately $900 million on share repurchases since the beginning of 2010.