In light of these negative economic indicators, the company remains cautious in the outlook for business activity in the first quarter and would expect less than normal seasonality in the global components business. With this economic uncertainty as a backdrop, the company is embarking on an incremental productivity enhancement program that will include expense reductions of $40 million on an annual basis.
“As we look to the first quarter, we believe that total sales will be between $4.6 billion and $5.0 billion, with global components sales between $3.05 billion and $3.25 billion and global enterprise computing solutions sales between $1.55 billion and $1.75 billion. As a result of this outlook, we expect earnings per share, on a diluted basis, excluding any charges to be in the range of $.80 to $.92 per share. Our guidance assumes an average tax rate in the range of 28 to 29 percent, average diluted shares outstanding are expected to be 108.3 million, and the average Euro to USD exchange rate for the first quarter is 1.35 to 1,” said Mr. Reilly.
Please refer to the CFO commentary as a supplement to the company’s earnings release, which can be found at www.arrow.com/investor.
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 100,000 original equipment manufacturers, contract manufacturers and commercial customers through a global network of more than 470 locations in 55 countries.Certain Non-GAAP Financial Information In addition to disclosing results that are determined in accordance with Generally Accepted Accounting Principles (“GAAP”), the company provides certain non-GAAP financial information relating to operating income, net income attributable to shareholders and net income per basic and diluted share, each as adjusted for certain charges, credits, and gains and losses that the company believes impact the comparability of its results of operations. These charges, credits, and gains and losses arise out of the company’s efficiency enhancement initiatives, acquisitions, and settlement of certain legal and tax matters. A reconciliation of the company’s non-GAAP financial information to GAAP is set forth in the table below.