ENGLEWOOD, Colo. — Arrow Electronics, Inc. on Wednesday reported third-quarter 2014 net income of $146.9 million, or $1.47 per share on a diluted basis, compared with net income of $96.8 million, or $.95 per share on a diluted basis in the third quarter of 2013. Excluding certain items in the third quarters of both 2014 and 2013, net income would have been $140.2 million, or $1.40 per share on a diluted basis, in the third quarter of 2014 compared with net income of $119.9 million, or $1.18 per share on a diluted basis, in the third quarter of 2013. Third-quarter sales of $5.61 billion increased 11 percent from sales of $5.05 billion in the prior year. Sales, as adjusted, increased 6 percent year over year.
“In the third quarter we again produced outstanding results and invested in our long-term strategic sales-related initiatives. Earnings per share of $1.40 were above our expectations, with sales of $5.6 billion at the high end of our guidance. Both of our global components and enterprise computing solutions segments delivered sales and operating income growth. The stable, slow-growth demand environment for global components matched our expectations. Our focus on the higher value portion of the datacenter has aligned our enterprise computing solutions business with the faster growth areas of IT spending,” said Michael J. Long, chairman, president, and chief executive officer.
Global components third-quarter sales of $3.73 billion increased 8 percent year over year. Sales, as adjusted, grew 5 percent year over year. Americas components sales increased 2 percent year over year. Europe components sales grew 4 percent year over year, and the region grew year over year for the sixth consecutive quarter on an as-adjusted basis. Components sales in the Asia-Pacific region increased 18 percent year over year.
Global enterprise computing solutions third-quarter sales of $1.88 billion grew 19 percent year over year. Sales, as adjusted, grew 7 percent year over year with growth in both Americas and Europe. Both regions continued to experience very strong growth in software and services, while storage and networking also delivered growth.
“Returns advanced over the prior year for the fourth consecutive quarter. Cash flow from operations on a trailing 12-month basis was $431 million as we continue to exceed our cash flow target,” said Paul J. Reilly, executive vice president, finance and operations, and chief financial officer. “The strong management of our balance sheet and cash flow provided us with the opportunity to return approximately $50 million to shareholders through our stock repurchase program in the third quarter, approximately $55 million, thus far, in the fourth quarter, and approximately $230 million on a trailing 12-month basis.”
Arrow’s net income for the first nine months of 2014 was $381.9 million, or $3.80 per share on a diluted basis, compared with net income of $264.6 million, or $2.53 per share on a diluted basis in the first nine months of 2013. Excluding certain items1 in both the first nine months of 2014 and 2013, net income would have been $408.6 million, or $4.06 per share on a diluted basis, in the first nine months of 2014 compared with net income of $347.0 million, or $3.32 per share on a diluted basis, in the first nine months of 2013. In the first nine months of 2014, sales of $16.4 billion increased 8 percent from sales of $15.2 billion in the first nine months of 2013. Sales in the first nine months of 2014, as adjusted, increased 2 percent year over year.
“As we look to the fourth quarter, order patterns are unchanged and the supply chain remains well managed. We expect normal seasonality for our global components and enterprise computing solutions businesses. We believe that total sales will be between $6.1 billion and $6.5 billion, with global components sales between $3.4 billion and $3.6 billion and global enterprise computing solutions sales between $2.7 billion and $2.9 billion," Reilly said.
