Arrow Earnings Hit by Softening Market

Electronic News, April 30, 2001

IN A FIRST-QUARTER EARNINGS REPORT THAT IS GETTING REPEATED OVER and over across electronics distributors, Arrow Electronics Inc. of Melville, N.Y., revealed earnings that are above last year's first quarter, while down from the previous quarter. Arrow (nyse: ARW) reported a net income of $77.4 million for the quarter ended March 31, up 23 percent (before special charges) from a year earlier, but down 41 percent from the fourth-quarter 2000 income of $109 million. Likewise with sales, the company was up 18 percent over last year's first quarter, while down 11 percent from the previous quarter.

Francis Scricco, Arrow president and chief executive officer, explained that the quarter started with a soft components market that evolved into a wider downturn. Scricco warned that at current rates, second-quarter unit volumes will fall below first-quarter levels, and that given the industry's supply imbalances, that can be expected to translate into margin erosion. "At this point we do not have enough visibility to give explicit sales and earnings guidance for the second quarter or for the year," Scricco said. "However, I can say that the weakness we saw at the end of the first quarter is continuing."