Arrow misses targets

Distributor Arrow Electronics posted a mixed bag for its third quarter financials, with profit down despite an increase in turnover.

For the quarter ended 30 September 2007, the distribution behemoth, whose UK outpost is DNS Arrow, posted net profit of $76.1m on a $4.3bn turnover, compared to $98.3m profit on sales of $4.03bn.

Results for the first nine months of the year followed a similar pattern with profit hitting $258.2m on turnover of $12.6bn, compared to profit of $293.8m on $11.57bn turnover.

William Mitchell, chief executive of Arrow, admitted his firm had missed Wall Street expectations.

“The volatility in the world’s economies and the virtual shutdown of the credit markets made the third quarter especially difficult,” he said. “We delivered on our sales guidance and generated over $200m in cash flow from operations, an increase of $30m year on year, but fell short of our EPS (earnings per share) guidance due to a changing product mix and competitive pricing pressure.”

He continued: “There is no doubt that market conditions will continue to be challenging, and in response to the rapidly changing environment, we will make the appropriate and necessary decisions and adjustments to our business model to ensure continuing and profitable success, and long-term sustainability.”

Looking forward the distributor is remaining cautious with its Q4 predictions.

Paul Reilly, chief financial officer at Arrow Electronics, revealed Q4 turnover would be between $4.05 and $4.45bn.

“Given the poor economic conditions and unprecedented volatility in the financial markets, our visibility is more limited than normal. Taking this into account, we believe it is prudent to provide a winder than normal guidance range to account for the greater degree of uncertainty.”