Arrow's earnings exceed expectations 3 February, 2010 By Mark Cox

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"We ended the year on a very positive note, with sales, EPS, and cash flow well above our expectations," said Michael J. Long, chairman, president, and chief executive officer, in a statement. "Our results reflect the exceptional work of our employees around the globe and demonstrate our commitment to our strategic priorities despite the external economic pressures of the past year.,"

"Although 2009 was a challenging year, we have made great strides to accelerate our sales excellence strategy, advance our industry-leading position, simplify our business processes, and strengthen our financial base," Long added. "I am confident that we will leverage the momentum from the third and fourth quarters to maximize sales and profitable growth while taking advantage of opportunities in the market."

"The fourth-quarter results demonstrate the significant leverage we have in the business, as operating income grew faster than sales on both a year-over-year and sequential basis," said Paul J. Reilly, executive vice president and chief financial officer. "We have also seen positive trends in gross margin in our components business. This is our second consecutive quarter of sequential improvement in gross margin in our core small and medium-sized customers in North America and Asia Pacific, while Europe's sequential increase in gross margin was well ahead of normal seasonality."

For the channel, the key element is Arrows' global enterprise computing solutions ("ECS") unit, and its' sales of $1.61 billion decreased 2 percent year over year.

"ECS sales were in line with the high end of normal seasonality, as all of our product lines showed significant double-digit sequential increases in sales, and we experienced year-over-year growth in industry-standard servers, software and services," Long said. "Our diversified and expanded portfolio of product offerings and our focus on high-growth enterprise markets have allowed us to strengthen our industry-leading position during the downturn.

Global components sales of $2.59 billion increased 6 percent year over year.

"Strong performance in global components was driven by better-than-expected performance in all of our core geographies," Long said. "North America and Europe have 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 percent year over year. We have made great strides to further simplify and unify global components in all regions, and we are confident that we will outperform the market."

For the full year, Arrow's net income for 2009 was $123.5 million ($1.03 per share on both a basic and diluted basis) on sales of $14.68 billion, compared with a net loss of $613.7 million ($5.08 per share on both a basic and diluted basis) on sales of $16.76 billion in 2008. Cash flow from operations for the year ended December 31, 2009 was nearly $850 million.