The latest earnings results are in for Arrow (the distributor) and Meru Networks. How is the technology sector performing so far in 2013? Here are the latest clues.
Arrow Electronics (NYSE:ARW) and Meru Networks (NASDAQ:MERU) both delivered quarterly earnings results today, providing more clues about how the technology market has been performing in recent months. Here's the recap.
Arrow earnings fell 31 percent to $77.9 million, or $0.72 per share, in Q1 2013, as compared to the same period last year when the company posted $113.6 in net income, or $1.00 per share.
First quarter sales at $4.85 billion slid 1 percent from the $4.89 billion Arrow recorded last year.
Arrow’s Enterprise Computing Solutions (ECS) unit posted an 8 percent year-over-year sales uptick to $1.66 billion for the quarter but the company’s global components wing saw sales dip 5 percent to $3.19 billion.
“We performed well in the first quarter. Sales of $4.8 billion were in line with our expectations and earnings per share of $0.89 were above the midpoint of our guidance,” said Michael J. Long, Arrow chairman, president and chief executive.
Arrow said that ECS storage, software and services sales “grew at a healthy rate year-over-year,” noting that the unit closed the quarter with a stronger performance than expected.
“Our ECS business continues to deliver excellent performance, reaching record-level first-quarter sales, while posting the 13th consecutive quarter of organic growth,” said Long.
Paul J. Reilly, Arrow chief financial officer, said the company plans to lop an additional $35 million from expenses to bring the total of annualized cuts to some $75 million in 2013.
“With a more thorough review of our processes and productivity enhancement opportunities, in part driven by new systems, we will be able to exceed that commitment and reduce expenses by more than $75 million on an annual basis, all while selectively investing in the long-term future of the company,” he said.
Going forward, Arrow expects Q2 2013 sales to come in between $4.9 billion and $5.3 billion, with global components sales between $3.15 billion and $3.35 billion and global ECS sales between $1.75 billion and $1.95 billion. Earnings are expected in the range of $0.95 to $1.07 per share.
Meru Cuts Losses
Meanwhile, enterprise wireless LAN provide Meru Networks lost $3.6 million, or $0.18 per share, in Q1 2013, paring its earnings slide by some 75 percent from the same period last year when the company lost $14.5 million, or $0.82 per share.
Total sales for the period rose 27 percent to $24.7 million when compared to the $19.4 million Meru recorded in Q1 2012. Products revenues for Q1 2013 were $20.6 million, up 30 percent from the $15.8 million Meru reported last year.
Dr. Bami Bastani, Meru president and CEO, credited the company’s strategy to focus on certain vertical markets and do a better job controlling costs with its positive performance for the quarter.
"We are very pleased to have delivered record first quarter revenues," said Bastani. "Meru's strategy of focusing on three verticals—education, healthcare and hospitality—combined with ongoing cost controls, continues to be successful in driving the company's turnaround."
Overall, the tech sector has delivered a mixed bag of results in Q1.