Arrow Electronics Inc. Reports Operating Results (10-K)

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Feb 03, 2010
Arrow Electronics Inc. (ARW, Financial) filed Annual Report for the period ended 2009-12-31.

Arrow Electronics Inc. has a market cap of $3.25 billion; its shares were traded at around $27.17 with a P/E ratio of 16.5 and P/S ratio of 0.2. Arrow Electronics Inc. had an annual average earning growth of 0.7% over the past 10 years.ARW is in the portfolios of Robert Rodriguez of FPA Capital, First Pacific Advisors of First Pacific Advisors, LLC, Arnold Schneider of Schneider Capital Management, NWQ Managers of NWQ Investment Management Co, David Dreman of Dreman Value Management, Chuck Royce of ROYCE & ASSOCIATES, Jeremy Grantham of GMO LLC.

Highlight of Business Operations:

The company has two business segments, the global components business segment and the global enterprise computing solutions ("ECS") business segment. The company distributes electronic components to OEMs and CMs through its global components business segment and provides enterprise computing solutions to VARs through its global ECS business segment. For 2009, approximately 66% of the company's sales were from the global components business segment, and approximately 34% of the company's sales were from the global ECS business segment. The financial information about the company's business segments and geographic operations is found in Note 16 of the Notes to Consolidated Financial Statements.

Within the global components business segment, approximately 70% of the company's sales consist of semiconductor products and related services, approximately 18% consist of passive, electro-mechanical, and interconnect products, consisting primarily of capacitors, resistors, potentiometers, power supplies, relays, switches, and connectors, and approximately 12% consist of computing, memory, and other products. Most of the company's customers require delivery of their orders on schedules or volumes that are generally not available on direct purchases from manufacturers.

Within the global ECS business segment, approximately 26% of the company's sales consist of proprietary servers, 9% consist of industry standard servers, 30% consist of software, 29% consist of storage, and 6% consist of services.

The company sells the products of over 900 suppliers. Sales of products and services from IBM accounted for approximately 12% of the company's consolidated sales in 2009. No other single supplier accounted for more than 10% of the company's consolidated sales in 2009. The company believes that many of the products it sells are available from other sources at competitive prices. However, certain parts of the company s business, such as the company's global ECS business segment, rely on a limited number of suppliers with the strategy of providing focused support, deep product knowledge, and customized service to suppliers and VARs. Most of the company's purchases are pursuant to authorized distributor agreements, which are typically cancelable by either party at any time or on short notice.

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