Wednesday, Arrow Electronics, Inc. (ARW), a provider of engineered electronic components and network solutions, reported a sharp decline in earnings for the second quarter, as sales fell 22%.
Net income for the quarter declined to $21.1 million or $0.18 per share from $96.2 million or $0.79 per share in the corresponding period last year.
Results for the most recent quarter includes restructuring and integration charges of $16.1 million, or $0.13 per share, compared to $5.9 million, or $0.05 per share, last year primarily related to initiatives taken by the company, in both years, to improve operating efficiencies.
Excluding items, net income declined to $37.2 million or $0.31 per share from $102.1 million $0.84 per share in the year-ago quarter. On average, ten analysts polled by Thomson Reuters expected the company to earn $0.29 per share for the quarter. Analysts estimates typically exclude special items.
Sales declined 22% to $3.39 billion from $4.35 billion in the corresponding period last year. Eight Street analysts expected the company to report sales of $3.42 billion for the quarter.
Global enterprise computing solutions sales of $1.12 billion fell 19% year over year and Global components sales of $2.27 billion slid 23% year over year.
Selling and administrative expenses declined to $315 million from $421.8 million in the year-ago period.
Paul Reilly, executive vice president and chief financial officer of the company said, "Given the market realities we are faced with, we have an additional $100 million in annual cost reductions that are expected to be implemented in the second half of 2009, primarily in our European operations.
For the first six-month period, net income declined to $47.8 million or $0.40 per share from $182.1 million or $1.48 per share in the prior year period. Sales declined to $6.81 billion from $8.38 billion in the year-ago period.
Looking ahead, the company expects total third-quarter sales to be between $3.1 billion and $3.7 billion. Earnings, excluding any charges, are expected to be in the range of $0.25 to $0.37 per share. Currently, Street analysts expect the company to earn $0.32 per share on sales of $3.37 billion for the third quarter.
The guidance assumes that the average Euro to USD exchange rate for the third quarter is 1.41 to 1, compared with an average exchange rate of 1.50 to 1 in the third quarter of 2008.
ARW is currently up $0.18 or 0.73% and trades at $24.69.
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