Arrow Electronics, Inc. (ARW) recently announced that its Board of Directors has approved a share repurchase program of $100 million. The company expects to repurchase shares in calibrated amounts to offset the dilution from the granting of equity-based compensation plans.

Arrow had previously announced similar programs in 2006 and 2007, which resulted in the repurchase of $200 million of common stock.

Fourth Quarter Results Beat Expectations

Last month, results for the fourth quarter beat expectations. Arrow has recorded a top-line year-over-year growth of 3% and sequential growth of 15%.

Global components sales of $2.59 billion increased 6% year over year driven by the better-than-expected performance in all its core geographies. Global enterprise computing solutions reported sales of $1.61 billion, down 2% year over year but up 42% sequentially.

Earnings per share of 64 cents 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 in 2008.

Estimate Revisions

Despite results beating expectations in the fourth quarter, there have been no estimate revisions by the analysts covering the stock.

Arrow expects sales in the first quarter of 2010 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. The current Zacks Consensus Estimate is 58 cents with a downward potential of 1.72%.

Arrow delivered a 4.92% earnings surprise in the fourth quarter and a 12.12% surprise in the third quarter. On an average, Arrow has come ahead of the Zacks Consensus Estimate by 7.46% in the last four quarters.

We expect overall demand to improve going forward with the economy showing signs of revival. We reiterate our Outperform rating on the stock.

 

“ARW” Free Stock Analysis: Buy? Sell? Hold?
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