Arrow Electronics, Inc. (NYSE:ARW) today reported second-quarter 2012 net income of $114.4 million, or $1.02 per share on a diluted basis, compared with net income of $156.2 million, or $1.33 per share on a diluted basis in 2011. Excluding certain items in both 2012 and 2011 as described in the non-GAAP earnings reconciliation table, net income of $124.1 million, or $1.11 per share on a diluted basis, in the second quarter of 2012 compared with net income of $159.8 million, or $1.36 per share on a diluted basis, in the second quarter of 2011. Second-quarter sales of $5.15 billion declined 7 percent from sales of $5.54 billion in the prior year. Pro forma for acquisitions and excluding the impact of foreign currency, sales declined 5 percent year over year.
“In a challenging macroeconomic environment that weakened throughout the quarter, we executed well, with sales and earnings per share in line with our expectations. Although the macro environment continues to be challenging, we remain committed to selectively investing in line with our strategic priorities to drive organic growth and strengthen the business. At the same time, we are taking $20 million in additional cost and expense reduction actions as we continue to advance the efficiency of our organization,” said Michael J. Long, chairman, president, and chief executive officer.
“We remain focused on our key financial objectives and have generated more than $575 million in cash flow from operations over the last 12 months, well in excess of our target,” said Paul J. Reilly, executive vice president, finance and operations and chief financial officer. “We again delivered return on invested capital substantially ahead of our weighted average cost of capital.”
Global enterprise computing solutions (“ECS”) second-quarter sales of $1.70 billion increased 2 percent year over year. Sales were in line with our expectations driven by another quarter of strong performance in ECS Europe, with sales increasing 12 percent year over year in local currency, as our supplier matrix expansion strategy continues to pay dividends. In the Americas we performed very well, growing sales 3 percent year over year, even as market growth has slowed. On a global basis, we saw solid double-digit year-over-year growth in services, storage, and software, offset by declines in servers. During the quarter we completed the acquisition of The Altimate Group, a value-added distributor of enterprise and midrange computing products, services, and solutions. This transaction further strengthens our relationships with key hardware, software and storage suppliers in Europe, supporting the strategic initiative to extend the ECS product matrix across the region.
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