The economic downturn and the resultant decline in the equity markets led to the non-cash impairment charge of $1.02bn. About 70 per cent of the charge related to the distributor's global components arm, with the remainder related to its global ECS business segment.
During 2008's closing quarter, the company also ascertained an other-than-temporary decline in the fair value of its investment in electronics firm Marubun Corporation. Accordingly, Arrow recognised a loss of $10m on the write-down of this investment.
Arrow asserted that these charges would have no effect on the company's cashflow, liquidity or capital resources. This announcement comes little more than two weeks after the distributor claimed it had hit its somewhat modest targets.
Arrow's revenue for the quarter dropped seven per cent to $4.09bn while net profit fell by more than 60 per cent to $43.2m. The company has also become the second US distribution giant this month to face a massive goodwill impairment charge.
Rival Avnet was hit with a $1.31bn charge resulting from the steep decline in its share price over the past six months. The charge left the company reeling from a $1.2bn net loss for the three months to 27 December.
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