Arrow Completes TechTurn Buy

Arrow Electronics, Inc. (NYSE:ARW - News) recently completed the acquisition of TechTurn, Ltd. The acquisition was announced in late January.

Headquartered in Austin , Texas , TechTurn is an electronic asset disposition (:EAD) services provider which possesses a broad portfolio catering to technology recovery, refurbishing and remarketing services which they globally offer, primarily to major Fortune 500 companies.

The acquisition appears to be a profitable one as TechTurn has been yielding favorable results of late with revenues to surpass $50 million approximately in 2012.

After Beijing -based Seed International Ltd., TechTurn is the next major acquisition executed by Arrow in recent times.

Earlier this month, Arrow posted a net income (excluding loss on prepayment of debt and restructuring, integration, and other charges) of $157.3 million or $1.38 per share in the fourth quarter of 2011 compared with a net income of $151.6 million or $1.29 per share in the year-ago quarter.

The results beat the Zacks Consensus Estimate of $1.29. Including the above mentioned items, net income came in at $174.1 million or $1.53 per diluted share compared to a net income of $1.53 per diluted share or $1.34 per diluted share in the year-ago quarter.

Earnings estimates moved up thereafter, as six out of the ten analysts covering the stock upped their estimates in the last thirty days.

Arrow reported sales of $5.44 billion in the quarter, up 3.8% year over year and up 4.6% sequentially.

For 2011, sales increased 14% to $21.4 billion driven by the addition of recent acquisitions and growth in both segments. Net income jumped 24.8% year over year to $598.8 million.

Going forward, management expects sales in the first quarter of 2012 to come between $4.67 billion and $5.07 billion.

Global components sales are projected between $3.35 billion and $3.55 billion. Global enterprise computing solutions sales are estimated between $1.32 billion and $1.52 billion. Earnings per share (excluding any one-time charges) are projected around $1.01 to $1.13 per share.

We continue to maintain a Neutral recommendation on Arrow. Our Neutral recommendation is supported by Zacks #3 Rank, which translates into a short-term rating of Hold.

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