Arrow says profitability was not the best in the third quarter due to its product mix and investments.Arrow Electronics saw strong growth in its global enterprise computing solutions group in the third quarter, with sales climbing by 97 percent to $1.17 billion on a spate of acquisitions including KeyLink Systems Group and Alternative Technology.
On a pro forma basis, sales increased 15 percent year over year for the distribution giant's enterprise computing operations.
"We again outgrew the market with strong double-digit performance in industry standard servers, storage, software, and services, as well as modest growth in proprietary servers," said William E. Mitchell, chairman, president and CEO of Arrow Electronics, in a statement.
However, Mitchell added that the product mix and investments hurt the bottom line in the third quarter, a condition he expects to ease next quarter when he said the company would return to a higher level of profitability.
For all its divisions, Arrow reported third quarter net income of $98.3 million or 79 cents per diluted share on sales of $4.03 billion compared with net income of $85.9 million or 70 cents per diluted share on sales of $3.45 billion for the same quarter a year ago.
Arrow expects total fourth quarter sales will be between $4.15 billion and $4.45 billion, with global component sales between $2.65 billion and $2.85 billion and global enterprise computing solutions sales between $1.50 billion and $1.60 billion. Earnings per share, on a diluted basis, excluding any special charges, are expected to be in the range of 90 cents to 95 cents, an increase of 25 percent to 32 percent from last year's fourth quarter, the company said.
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