Arrow Electronics’ European component sales endured a grim first quarter plummeting 16 per cent year on year. The company cited a prospective change in the accounting for revenue related to a fulfilment contract and to a lesser extent a worsening of European economic conditions. Sales in the Americas fell 5 per cent in Q1 so the company will have been relieved to report that sales in Asia/Pacific bucked the trend with an 11 per cent uptick. Globally component sales fell five per cent to $3.19bn year on year.
The distributor reported a year on year decline in first quarter profit from $113.6m to $77.9m. That did not prevent Arrow Electronics’ President, Chairman and Chief Executive Officer Michael J Long delivering an upbeat message.
“We performed well in the first quarter. Sales of $4.8bn were in line with our expectations. Our Enterprise Computing Solutions business continues to deliver excellent performance, reaching record-level first-quarter sales, while posting the 13th consecutive quarter of organic growth,” said Long. “As we look to the second quarter, we would expect the world’s economies to be consistent with what we experienced in the first quarter, and therefore we would expect to see normal seasonality across our businesses.”
First-quarter sales of $4.85 billion declined one per cent from sales of $4.89 billion in the prior year.
Global enterprise computing solutions (ECS) first-quarter sales of $1.66bn increased eight percent year over year.
The company reckons to make savings of $75m on an annual basis following a thorough review of processes and productivity enhancement opportunities, in part driven by new systems.
In the second quarter the company believes that total sales will be between $4.9bn and $5.3bn, with global components sales between $3.15bn and $3.35bn and global enterprise computing solutions sales between $1.75bn and $1.95bn.