Earlier in the day, Arrow Electronics, Inc., (ARW) upgraded its outlook for the fourth quarter of 2009. The company now expects revenues to come between $3.8 billion and $4.2 billion in the December quarter, up from the previous guidance of $3.65 billion to $4.25 billion.

Management stated that the upgrade in guidance was driven by stronger than expected growth in the components business. However, sales in the last few weeks of December will determine the sales of computing solutions business.

Earnings per share is now projected between 57 cents and 63 cents, up from the earlier estimate of 44 cents to 56 cents.

Arrow had earlier acquired A.E. Petsche Company (“A.E. Petsche”), a leading provider of interconnect products Incorporatedluding specialty wire, cable and harness management solutions, to the aerospace and defense markets. The company recorded sales of $220 million in 2008.

The acquisition is expected to close by the end of 2009. Arrow expects that the acquisition will be accretive to 2010 earnings by 10 cents – 12 cents.

Last week, rival Avnet Inc. also raised its guidance for the second fiscal quarter driven by strength in its Electronics Marketing division. Business momentum is still muted and revenue growth and margin expansion are a few quarters away. Though the early signs of recovery improve business sentiments, IT spending is yet to pick up. The recovery is expected to be slow and steady and visibility is not clear – at least in the near term. Orders are yet to return to normal levels.

In recent times, both ARW and rival Avnet Inc. (AVT) have been acquiring smaller players all over the world to strengthen their businesses.

New York-based Arrow Electronics is one of the world’s largest distributors of electronic components and computing products. The company sources products from about 800 suppliers and distributes them to over 130,000 customers (original equipment manufacturers, contract manufactures and commercial customers).

Zacks Investment Research

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