Arrow sales slump continues worrying pattern
Distributor follows in footsteps of rivals Ingram and Avnet by posting quarterly revenue drop
Shares in Arrow Electronics took a dip this morning after it became the third global distribution giant inside a week to report slowing sales.
Ingram Micro and Avnet logged sales declines last week, with both singling out Europe as the problem.
It was a similar story for competitor Arrow as it today reported that sales for its fiscal first quarter to 31 March came in six per cent down on last year, at $4.89bn (£3.01bn).
The results also missed Wall Street expectations, causing Arrow's shares to sink by a few cents this morning.
But it was a tale of two business units for the New York-listed distributor. Sales at its enterprise computing solutions (ECS) arm rose 15 per cent annually to $1.54bn, with storage, software and services all rising by more than 20 per cent.
In contrast, revenue at Arrow's larger global component arm sank 14 per cent to $3.35bn, which it blamed on weak macroeconomic conditions in Europe.
Net profits fell from $136.3m to $113.6m, although chief executive Michael Long claimed the results were in line with the firm's internal expectations.
"Cashflow generation was a bright spot in the first quarter, as we generated $250m in cashflow from operations, with contributions from both business segments," he said.
Last week, Ingram reported a one per cent fall in quarterly sales to $8.6bn as European revenue slowed. A day earlier, Avnet reported a 5.9 per cent fall in quarterly sales to $6.3bn, with EMEA a particular black spot.
All eyes will be on Tech Data – the last of the quartet of global distribution giants – when it posts its quarterly results (for the period ending yesterday) on 21 May.