The rating on Melville, N.Y.-based Arrow Electronics Inc. reflects the company's 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, as well as the potential for variable profitability and debt protection metrics resulting from volatile industry demand. Arrow is one of the leading global electronic components and computer products distributors. The company reported revenue of $16 billion in fiscal 2007. Revenue increased more than 15% in each of the past two years, bolstered by an acquisitive growth strategy. Although visibility of industry demand is very limited, moderate industry growth conditions are expected to continue into 2008. At lower growth rates, competitive pricing pressures make
