Shares of Arrow Electronics Inc. (NYSE: ARW) soared Thursday after the company topped estimates with strong fourth quarter earnings and three brokerage firms raised their ratings and estimates on the company.
Arrow, a distributor of semiconductor components, was up 8 7/16 to 31 7/16 near midday and was among the top gainers on the New York Stock Exchange.
On Wednesday, Arrow reported fourth quarter earnings of $44 million, or 46 cents a share, up from $32.3 million, or 34 cents, a year ago. First Call had expected earnings of 44 cents a share. Sales in the quarter were a record $2.5 billion, up from $2.2 billion a year ago.
"Our fourth quarter results clearly indicate that the long-awaited recovery in our industry is at hand," said Stephen P. Kaufman, CEO of Arrow.
Donaldson, Lufkin & Jenrette analyst Mark Hassenberg raised his 2000 earnings per share estimate for Arrow to $2.27 from $2.06, and initiated an estimate for 2001 of $3.15 per share. "Both of those numbers are conservative in the current environment,'' said Hassenberg. He also raised his 12-month price target for the stock to $45 from $35.
Morgan Stanley Dean Witter raised Arrow Electronics to ''strong buy'' from "outperform.''
On Wednesday, Merrill Lynch analyst Jerry Labowitz set a price target of $30 for Arrow shares and raised his rating on the stock to "buy'' from "accumulate.''
Labowitz also raised his earnings estimates for 2000 to $2 a share from $1.80, based on the improvement seen in 1999 in the company's core components business, as well as strength in January.
Reuters contributed to this report.