TMCnet News
Arrow Electronics Reports First-Quarter ResultsArrow Electronics, Inc. (NYSE:ARW) today reported first-quarter 2017 net income of $114 million, or $1.26 per share on a diluted basis, compared with net income of $106 million, or $1.14 per share on a diluted basis, in the first quarter of 2016. Excluding certain items1, net income would have been $132 million in the first quarter of 2017, unchanged from the first quarter of 2016. Excluding certain items1, net income would have been $1.46 per share on a diluted basis, in the first quarter of 2017, compared with $1.43 per share on a diluted basis, in the first quarter of 2016. First-quarter sales of $5.76 billion increased 5 percent from sales of $5.47 billion in the prior year. In the first quarter of 2017, changes in foreign currencies had negative impacts on growth of approximately $73 million or 1 percent on sales and $.03 or 2 percent on earnings per share on a diluted basis compared to the first quarter of 2016. "Customers and suppliers are migrating to our platform of online and offline component distribution, on-premise and off-premise software-led solutions, and our sustainable technology solutions," said Michael J. Long, chairman, president, and chief executive officer. "Our unique approach drove record first-quarter earnings per share and record first-quarter sales that were at the high end of our expectation." Global components first-quarter sales of $4.06 billion grew 10 percent year over year. First-quarter sales, as adjusted, grew 12 percent year over year. Americas components sales grew 9 percent year over year. Asia-Pacific components sales grew 17 percent year over year. Europe components sales grew 6 percent year over year. Sales in the region, as adjusted, grew 10 percent year over year. Global components first-quarter operating income grew 1 percent year over year. "Global components sales exceeded the high end of our expectation for the second quarter in a row driven by our differentiated value proposition," said Mr. Long. Global enterprise computing solutions first-quarter sales of $1.7 billion declined 5 percent year over year. Global enterprise computing solutions first-quarter operating income grew 3 percent year over year and grew 4 percent year over year excluding amortization of intangibles expense. "ECS' growth was driven by our industry-leading software solutions, and we continue to believe operating income is the best measure of this business," added Mr. Long. "First-quarter cash flow from operations was negative $21 million. While seasonally negative, cash flow from operations improved compared to the prior-year first quarter despite substantial working capital investments to support our growth," said Chris Stansbury, senior vice president and chief financial officer. "We remain committed to returning excess cash to shareholders. During the first quarter we returned approximately $56 million to shareholders through our stock repurchase program. We had approximately $464 million of remaining authorization under our share repurchase programs at the end of the first quarter." 1 A reconciliation of non-GAAP adjusted financial measures, including sales, as adjusted, operating income, as adjusted, net income attributable to shareholders, as adjusted, and net income per share, as adjusted, to GAAP financial measures is presented in the reconciliation tables included herein. GUIDANCE "As we look to the second quarter, we believe that total sales will be between $5.975 billion and $6.375 billion, with global components sales between $4.05 billion and $4.25 billion, and global enterprise computing solutions sales between $1.925 billion and $2.125 billion. As a result of this outlook, we expect earnings per share on a diluted basis, to be in the range of $1.50 to $1.62, and earnings per share on a diluted basis, excluding any charges, to be in the range of $1.70 to $1.82 per share. Our guidance assumes an average tax rate toward the higher end of our longer term range of 27 to 29 percent and average diluted shares outstanding are expected to be 90 million. We are expecting the average USD-to-Euro exchange rate for the second quarter to be approximately $1.07 to €1. We estimate changes in foreign currencies will have negative impacts on growth of approximately $110 million, or 2 percent on sales, and $.05, or 3 percent, on earnings per share on a diluted basis compared to the second quarter of 2016," said Mr. Stansbury. "Based on our strong growth and disciplined operating expense management, we expect second-quarter earnings per share, at the midpoint, to grow 10 percent year over year adjusted for acquisitions and changes in foreign currencies," added Mr. Stansbury. Please refer to the CFO commentary, which can be found at investor.arrow.com, as a supplement to the company's earnings release. Arrow Electronics (www.arrow.com) is a global provider of products, services and solutions to industrial and commercial users of electronic components and enterprise computing solutions. Arrow serves as a supply channel partner for more than 125,000 original equipment manufacturers, contract manufacturers and commercial customers through a global network of more than 465 locations serving over 90 countries. Information Relating to Forward-Looking Statements This press release includes forward-looking statements that are subject to numerous assumptions, risks, and uncertainties, which could cause actual results or facts to differ materially from such statements for a variety of reasons, including, but not limited to: industry conditions, the company's implementation of its new enterprise resource planning system, changes in product supply, pricing and customer demand, competition, other vagaries in the global components and global enterprise computing solutions markets, changes in relationships with key suppliers, increased profit margin pressure, the effects of additional actions taken to become more efficient or lower costs, risks related to the integration of acquired businesses, changes in legal and regulatory matters, and the company's ability to generate additional cash flow. Forward-looking statements are those statements which are not statements of historical fact. These forward-looking statements can be identified by forward-looking words such as "expects," "anticipates," "intends," "plans," "may," "will," "believes," "seeks," "estimates," and similar expressions. Shareholders and other readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date on which they are made. The company undertakes no obligation to update publicly or revise any of the forward-looking statements. For a further discussion of factors to consider in connection with these forward-looking statements, investors should refer to Item 1A Risk Factors of the company's Annual Report on Form 10-K for the year ended Dec. 31, 2016. Certain Non-GAAP Financial Information In addition to disclosing financial results that are determined in accordance with accounting principles generally accepted in the United States ("GAAP"), the company also provides certain non-GAAP financial information relating to sales, operating income, net income attributable to shareholders, and net income per basic and diluted share. The company provides sales, income, or expense on a non-GAAP basis adjusted for the impact of changes in foreign currencies and the impact of acquisitions by adjusting the company's operating results for businesses acquired, including the amortization expense related to acquired intangible assets, as if the acquisitions had occurred at the beginning of the earliest period presented (referred to as "impact of acquisitions"). Operating income, net income attributable to shareholders, and net income per basic and diluted share are adjusted to exclude identifiable intangible amortization, restructuring, integration, and other charges, and certain charges, credits, gains, and losses that the company believes impact the comparability of its results of operations. These charges, credits, gains, and losses arise out of the company's efficiency enhancement initiatives and acquisitions (including intangible assets amortization expense). A reconciliation of the company's non-GAAP financial information to GAAP is set forth in the tables below. The company believes that such non-GAAP financial information is useful to investors to assist in assessing and understanding the company's operating performance and underlying trends in the company's business because management considers these items referred to above to be outside the company's core operating results. This non-GAAP financial information is among the primary indicators management uses as a basis for evaluating the company's financial and operating performance. In addition, the company's Board of Directors may use this non-GAAP financial information in evaluating management performance and setting management compensation. The presentation of this additional non-GAAP financial information is not meant to be considered in isolation or as a substitute for, or alternative to, sales, operating income, net income and net income per basic and diluted share determined in accordance with GAAP. Analysis of results and outlook on a non-GAAP basis should be used as a complement to, and in conjunction with, data presented in accordance with GAAP.
View source version on businesswire.com: http://www.businesswire.com/news/home/20170504005438/en/ |