Arrow Electronics Inc. (ARW) reported third-quarter 2013 adjusted earnings per share of $1.18, which was short of the Zacks Consensus Estimate of $1.20. On a year-over-year basis earnings increased from $1.09 per share.
Despite a modest year-over-year increase of 1.7%, adjusted revenues of $5.048 billion lagged the Zacks Consensus Estimate of $5.131 billion. However, including the contribution from acquisitions of $5.5 million, revenues came in at $5.053 billion, marginally down from the year-ago quarter.
Revenues from Global components increased 2.8% on a year-over-year basis to $3.47 billion. Adjusted revenues increased 0.7% from the year-ago quarter. Revenues from America increased 2% while Asia-Pacific revenues remained flat. Adjusted European revenues increased 3.9% on a year-over-year basis.
Revenues from Global enterprise computing solutions (:ECS) came in at $1.58 billion, down 0.6% year over year. Revenues from America grew 3%, but failed to offset the 13.5% decrease in revenues from Europe.
Arrow reported adjusted operating margins of 3.9% which was up 8 basis points (bps) from the year-ago quarter primarily due to lower operating expenses as a percentage of revenues. Adjusted operating expenses increased marginally (up 0.4%) from the year-ago quarter to $477 million but were down 12 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 $119.9 million or $1.18 per share compared with $119.3 million or $1.09 per share in the year-ago quarter.
Arrow ended the quarter with cash and cash equivalents of $251.8 million, down from $345.9 million at the end of the previous quarter. Long-term debt was $1.91 billion, down from $2.10 billion at the end of the previous quarter. During the quarter, the company generated $81 million in cash from operations.
For the fourth quarter of 2013, Arrow expects sales to range between $5.6 billion and $6 billion, reflecting sequential increase in revenues. Global components sales are projected between $3.2 billion and $3.4 billion. Global enterprise computing solutions sales are estimated between $2.4 billion and $2.6 billion. The company expects non-GAAP earnings to range between $1.56 and $1.68. The Zacks Consensus Estimate stands at $1.62 per share.
Electronic component distributor Arrow posted lower-than-expected third-quarter results. However, year-over-year comparisons were modestly up and the company’s positive commentary about enhanced productivity, annual cost savings and expected contributions from Europe are encouraging. Moreover, the company provided encouraging guidance.
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