Currency fluctuations dampen Arrow's Q2 results

Sales up three per cent at $5.68bn at distributor giant but net profit drops

Arrow's sales were up three per cent in its Q2 2015, but weaker foreign currencies hampered its overall results.

Europe saw 'strong demand' for both sides of the business, with year-on-year component sales described as flat, but a positive eight per cent increase in enterprise computing sales. The region also experienced strong software growth, according to Arrow.

Overall, the distributor reported turnover of $5.68bn (£3.64bn) in the quarter, a three per cent increase on the $5.83bn in the same period last year. Net profit was slightly down at $123.9m, compared with $127.9m the previous year.

The firm revealed that in the second quarter, changes in foreign currencies wiped $350m off its topline, and seven per cent off its earnings per share on a diluted basis, when compared to the same period in 2014.

Michael Long, chief executive of Arrow, said: "Second-quarter sales exceeded the midpoint of our expectations. Excluding the impacts from changes in foreign currencies, EPS advanced nearly 16 per cent year-over-year, with both our global components and enterprise computing solutions segments delivering sales growth and expanded operating margins.

"Both businesses continued to experience strong demand in Europe. Our focus on selling comprehensive solutions resulted in record second-quarter operating income and operating margin for our enterprise computing solutions business."

Paul Reilly, CFO at Arrow said the firm's cash flow was also on target.

"With $461m in cash flow from operations in the second quarter, we again meaningfully exceeded our cash flow target. The highly effective management of our balance sheet and related strong cash flow provided us with the opportunity to both deploy capital toward our strategic initiatives and return approximately $78m to shareholders through our stock repurchase programme."