Arrow Electronics Inc.
) reported fourth-quarter 2013 adjusted earnings per share of
$1.69, which beat the Zacks Consensus Estimate of $1.62. On a
year-over-year basis, earnings per share increased 30.8% and came
ahead of management's guided range of $1.56 and $1.68.
Arrow's revenues on a reported basis came in at $6.15 billion
which increased 13.9% from the year-ago quarter andwas also above
management's guided range of $5.6 to $6.0 billion. Reported
revenues also surpassed the Zacks Consensus Estimate of $5.79
billion. On an adjusted basis, revenues increased 8.4% from the
year-ago quarter to $6.25 billion. The company's book-to-bill
ratio was 1.03.
On a segmental basis, revenues from Global components
increased 7.9% on a year-over-year basis to $3.44 billion.
Adjusted revenues grew 5.8% from the year-ago quarter to $3.46
billion. Revenues from America increased 3%, while Asia-Pacific
revenues increased 9%. Adjusted European revenues increased 9.9%
on a year-over-year basis boosted segment revenues.
Revenues from Global enterprise computing solutions (ECS) came
in at $2.72 billion, up 22.5% year over year. Adjusted revenues
increased 11.9%. Revenues were boosted by Arrow's solid
performance in the value-added services, strong execution
capabilities and diversified product offerings. Revenues from
America grew 13% and revenues from Europe were up 23% year over
Arrow reported adjusted operating margins of 4.3% which was up
52 basis points (bps) from the year-ago quarter primarily due to
lower operating expenses as a percentage of revenues. Adjusted
operating expenses increased 4.1% from the year-ago quarter to
$522.0 million but were down 80 bps as a percentage of revenues
for the same period of time.
Arrow's adjusted net income (excluding the effect of
restructuring and amortization) came in at $172.0 million or
$1.69 per share compared with $139.6 million or $1.29 per share
in the year-ago quarter.
Arrow ended the quarter with cash and cash equivalents of
$390.6 million, up from $251.8 million at the end of the previous
quarter. Long-term debt was $2.23 billion, up from $1.91 billion
at the end of the previous quarter. During the quarter, the
company generated $215.0 million in cash from operations. During
the reported quarter, Arrow repurchased shares worth $50
For the first quarter of 2014, Arrow expects sales to range
between $5.1 and $5.5 billion, reflecting a sequential decline.
The Zacks Consensus Estimate is pegged at $5.30 billion.
Global components sales are projected between $3.3 and $3.5
billion. Global enterprise computing solutions sales are
estimated between $1.8 and $2.0 billion. The company expects
non-GAAP earnings to range between $1.14 and $1.26 (mid-point
$1.20 per share), down sequentially and lower than the Zacks
Consensus Estimate of $1.23 per share.
Electronic component distributor Arrow posted
better-than-expected fourth-quarter results. Year-over-year
comparisons were modestly up and the company had a favorable
book-to-bill ratio. Moreover, positive commentary about enhanced
productivity, annual cost savings and continued higher
contributions from Europe are encouraging. Additionally,
incremental sales from the strategic acquisitions, such as
Computerlinks, are expected to boost Arrow's top line, going
However, uncertain economic conditions and competition from
) are the concerns, going forward.
Currently, Arrow has a Zacks Rank #3 (Hold). Apart from Arrow,
investors may consider
Broadridge Financial Solutions
) that has a Zacks Rank #1 (Strong Buy).
ARROW ELECTRONI (ARW): Free Stock Analysis
AVNET (AVT): Free Stock Analysis Report
BROADRIDGE FINL (BR): Free Stock Analysis
INGRAM MICRO (IM): Free Stock Analysis Report
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