Back to top

Analyst Blog

Arrow Electronics (ARW - Analyst Report) posted an adjusted net income of $119.8 million or $1.05 per share in the first quarter of 2012 compared to $146.0 million or $1.24 per share in the previous year quarter and $157.3 million or $1.38 per share in the last quarter.

The results missed the Zacks Consensus Estimate of $1.07.

Revenues

Arrow reported sales of $4.89 billion, down 6.3% year over year and 10.1% sequentially, barely missing the Zacks Consensus Estimate of $4.91 billion.

On a segmental basis, Global component sales were $3.35 billion, down 13.9% year over year and 2.6% sequentially, facing enervations arising from the weakened European market which further deteriorated owing to slowing demands from the Chinese economy.

Revenues from Global enterprise computing solutions (ECS) came in at $1.54 billion, rising 14.9% year over year but down 23% sequentially. The annual rise was attributable to strength in sales from the American and European regions.

Margins

Gross margin came in at 13.9% versus 13.8% in the year-ago quarter and 13.7% in the previous quarter.

Operating margin came in at 3.8% compared to 4.2% in the previous year quarter and 4.5% in the previous quarter.

Balance Sheet and Cash Flows

Arrow ended the quarter with cash and cash equivalents of $739.7 million, up from $396.9 million at the end of the previous quarter. As of March 31, 2011, long-term debt was $2.25 billion, rising from $1.93 billion in the previous quarter.

During the quarter, the company generated $250.3 million of cash from operating activities and used $22.3 million for capital expenditure.

During the first quarter of 2012, Arrow repurchased 1.2 million shares for $50 million and the company currently has $100 million remaining in its current buyback program.

Guidance

Going forward, management expects sales in the second quarter of 2012 to come between $5.04 billion and $5.44 billion.

Global components sales are projected between $3.37 billion and $3.57 billion. Global enterprise computing solutions sales are estimated between $1.67 billion and $1.87 billion. Earnings per share (excluding any one-time charges) are projected around $1.08 to $1.20 per share.

The company currently retains a Zacks #2 Rank, which translates into a short-term ‘Buy’ rating. We also maintain a long-term ‘Neutral’ recommendation on the stock.

Please login to Zacks.com or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research

Close

Are you a new Zacks Member or a visitor to Zacks.com?

Top Zacks Features

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Zacks.com. Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
ERBA DIAGNO… ERB 3.00 +3.09%
SANCHEZ ENE… SN 34.18 +2.67%
THE PANTRY… PTRY 21.01 +2.04%
CLAYTON WIL… CWEI 117.57 +2.01%
INTEL CP INTC 35.14 +1.86%