ECS on target again for Arrow in robust Q3

Distribution leviathan wants to add more high-margin products and services as IT kit continues to fuel growth

Arrow is looking to expand its infrastructure vendor ranks as IT solutions again provided the bulk of the growth in a solid Q3 for the distribution titan.

For the three months to the end of September, the New York state-based firm saw sales grow 11.4 per cent year on year to almost $5.2bn (£3.3bn). Third-quarter operating profit rose 13.4 per cent on the corresponding period last year to $209m.

Worldwide revenue from the distributor's Enterprise Computing Solutions (ECS) business rose 26 per cent to $1.54bn, while components sales grew a relatively muted six per cent to $3.65bn. Arrow claims strong components sales growth in Europe and the US was tempered by softness in the Asia-Pacific market.

"Our ECS business again posted record quarterly revenue, with extremely strong year-over-year growth in all of our product lines led by services, software, proprietary servers, industry standard servers and storage," said Arrow chief executive Michael Long. "We are focused on several growth opportunities, including the addition of new suppliers, the penetration of new market segments and the expansion of our services portfolio."

In Q4, the broadliner is projecting global revenue of between $5.29bn and $5.69bn, with ECS sales forecast to burst through the $2bn mark.

But chief financial officer Paul Reilly claimed both divisions will be tightening their belts this quarter as the harsh economic climate comes to bear.

"In the fourth quarter, we would expect global ECS sales to be in line with the low end of normal seasonality," he said. "Sales in our core global components business are expected to be below normal seasonality, reflecting weaker global macroeconomic conditions. The outlook reflects selective targeted operating expense reductions across both businesses."