The ratings on Melville, N.Y.-based Arrow Electronics Inc. reflect a leading market position and good operating performance in the face of challenging industry conditions. These factors are offset by highly competitive, relatively low-margin industry characteristics, and the potential for variable profitability and debt protection metrics due to volatile industry demand. Arrow is one of the leading global electronic components and computer products distributors. Arrow reported revenues of $13.6 billion in fiscal 2006. Annual revenue growth has exceeded 15% over the past several quarters, bolstered by an acquisitive growth strategy. Although visibility of industry demand is very limited, moderate industry growth conditions are expected to continue through the remainder of 2007. At lower growth rates, competitive pricing pressures make it more
