Arrow Electronics reported a 10 percent increase in 2007 fourth quarter sales, and said it is prepared to act decisively to maintain profitability in the event of an economic downturn.
CEO and President Bill Mitchell said tha,t while daily conversations with Arrow's customers and suppliers gave him no indication that the economy was headed for a crash, the company would watch economic events closely. He added that Arrow's growth gave it a position of strength in the event of an economic downturn, and that the distributor would "act quickly and decisively to maintain its profitability" and take advantage of market opportunities for mergers and further acquisitions in the event the economy continued to trend downward.
Total sales were $4.42 billion in the fourth quarter of 2007, up from $3.49 billion in the same quarter in 2006, a 10 percent increase. Arrow said its fourth quarter 2007 net income decreased to $114.0 million, compared with $128.1 million in net income from the fourth quarter of 2006.
Arrow said results for the fourth quarter of 2007 were impacted by a $10 million restructuring and integration charge, and other non-GAAP charges incurred in 2006 and years prior. Excluding those items, net income for the fourth quarter of 2007 would have been $120.6 million and net income for the fourth quarter of 2006 would have been $88.6 million.
For the entire fiscal year 2007, Arrow said sales grew to $16 billion, a 26 percent rise over fiscal year 2006. Earnings per share were $0.97 on a diluted basis.
Arrow's Enterprise Computing Solutions group reported sales of $1.61 billion, an increase of 111 percent year over year, said Kevin Gilroy and Cathy Morris, presidents of ECS (Enterprise Computing Solutions). Gilroy and Morris said the growth was mostly organic, but that acquisitions of KeyLink Systems Group and Alternative Technology in 2007 were also factors, as was the acquisition of InTechnology's storage and security distribution business.
Mitchell also cited strong growth in servers, storage, software, and services, and added that 60 percent of the distributor's business is generated by those areas.
Global components sales increased 3 percent year over year to $2.81 billion, said Mike Long, president of Arrow's global components business. Long said the growth was led by central Europe and the Nordic regions, and that North American growth was driven by strong sales in the government and SMB markets.
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