Arrow earnings send its stock to new high

Melville-based Arrow Electronics' stock hit its all-time high Wednesday on better than expected first-quarter earnings. Nineteen minutes after the opening bell, the global electronic distributor's stock price briefly spiked to $47.50 from $45.02. The company reported profits of $136.3 million for the quarter, a 57 percent increase over the same period last year. Diluted earnings per share rose to $1.16, compared to 71 cents in the first quarter of 2010. The stock closed up 94 cents, or 2.1 percent, to $45.63.

"Arrow is clearly benefiting from still strong underlying fundamentals in the electronics component space," Stifel Nicolaus analyst Matthew Sheerin said in a report Wednesday. "On the computing side, we continue to see investments in servers and storage, Arrow's sweet spot."

Moody's Investors Service said in a report last month that Arrow should benefit from pockets of growth in storage, server and software sectors.

"We anticipate companies will continue to commit capital spending to build out next-generation data centers and smaller firms transition some of their IT infrastructure spending to storage/server virtualization and cloud computing as a way to lower administrative and capital costs," the Moody's report said.

The company acquired several companies in recent months, including the wireless division of Richard Electronics for $236 million and Nu Horizons Electronics, a global distributor of semiconductors and display components, for $161.1 million in the first quarter, which helped fuel growth.

An ongoing recovery in information-technology spending will likely exceed gross domestic product growth and spur a moderate revenue increase across all tech subsectors this year, Standard & Poor's said in a report on the high-tech industry released Monday. The aftermath of last month's earthquake in Japan could cause some global supply disruptions and price volatility this year, but the rating agency expects alternative supply sources to cover shortages in the short term.