Arrow Electronics Inc. (ARW) reported sales of $4.20 billion in the fourth quarter of 2009, up 3% from a year ago and up 15% sequentially.
Global components sales of $2.59 billion increased 6% year over year driven by better-than-expected performance in all the core geographies. On a sequential basis, sales were up 2%. North America and Europe continued to show improving sales trends, with both regions delivering sales growth well ahead of normal seasonality. Asia-Pacific continued to grow, with sales increasing more than 25% year over year.
Global enterprise computing solutions reported sales of $1.61 billion, down 2% year over year but up 42% sequentially.
Gross margin came in at 11.8%, down 90 basis points year over year due to an increase in the mix of business from Asia-Pacific as a percentage of total sales, ongoing pressure in the more profitable European components business compared to a year ago, and changes in product mix. On a sequential basis, gross margin increased 30 basis points, driven by increases in the North American and European component businesses.
Operating expenses declined 9% year over year in the quarter as the company continued to streamline the organization. Arrow reported a net income of $77.5 million or 64 cents per share compared to a net income of $72.0 million or 60 cents per share in the year-ago quarter. This easily beat the Zacks Consensus Estimate of 61 cents.
For 2009, the company reported sales of $14.68 billion compared to $16.76 billion in 2008. Net income came in at $202.5 million or $1.68 per share compared to a net income of $355.7 million or $2.93 per share in 2008.
Going forward, management expects sales in the first quarter of 2010 to come between $3.675 billion and $4.275 billion. Global components sales are projected between $2.675 and $3.075 billion. Global enterprise computing solutions sales are estimated between $1.0 and $1.2 billion. Earnings per share are forecasted between 50 cents and 62 cents.
2009 was a challenging year for the company amidst an acute recessionary environment. Management stated that since the current recession was more broad-based and deeper than expected, the industry still has some recovering to do before revenues return to the levels seen prior to the downturn.
New York-based Arrow Electronics is one of the world’s largest distributors of electronic components and computing products. The company sources products from about 800 suppliers and distributes them to over 130,000 customers (original equipment manufacturers, contract manufactures and commercial customers).
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