) reported a net income (excluding restructuring, integration, and
other charges) of $1.11 per share in the second quarter of 2012,
missing the Zacks Consensus Estimate by a penny. The quarter's
result was down from $1.36 per share in the year-ago
Reported net income came in at $114.4 million or $1.02 per share
compared with a net income of $156.2 million or $1.33 per share in
the second quarter of 2011.
Arrow reported sales of $5.15 billion, down 7% year over year
and 5.32% sequentially. Excluding the impact of acquisitions and
foreign currency, sales declined 5.0% year over year.
On a segmental basis, Global component sales were $3.45 billion,
down 11.0% year over year. Asia Pacific was ahead of normal
seasonality driven by China and Taiwan. In America, the company's
business was in line with management's expectations. Sales from
Europe were down 14% year over year.
Revenues from Global enterprise computing solutions (ECS) came
in at $1.70 billion, up 2.0% year over year, and in line with
management's expectations. Europe was the growth driver. Arrow
posted solid double-digit year-over-year growth in services,
storage and software, which was partially offset by a decline in
Operating margin came in at 3.7% compared with 4.5% in the
year-ago quarter and 3.8% in the previous quarter.
Management stated that the macroeconomic environment was weak
during the quarter. Hence, Arrow undertook $20 million in
additional cost and expense reduction actions to maintain
Balance Sheet and Cash Flows
Arrow ended the quarter with cash and cash equivalents of $325.8
million, down from $396.9 million at the end of the 2011. As of
June 30, 2012, long-term debt was $1.96 billion, down from $2.25
billion at the end of the previous quarter.
During the quarter, the company generated $114.5 million of cash
from operating activities and used $26.7 million for capital
By the end of the second quarter, Arrow completed the previously
announced $150 million share repurchase authorization. In June
2012, the Board of Directors authorized an additional $200 million
share repurchase program.
Going forward, management expects sales in the third quarter of
2012 to come between $4.8 billion and $5.2 billion. The company
continues to believe that opportunities in cloud computing continue
to be a strategic priority.
Global components sales are projected between $3.3 billion and
$3.5 billion. Global enterprise computing solutions sales are
estimated between $1.5 billion and $1.7 billion. Assuming an
average Euro to USD exchange rate of 1.20 to 1, earnings per share
(excluding any one-time charges) are projected around $1.00 to
ARROW ELECTRONI (ARW): Free Stock Analysis
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