UPDATE 2-Arrow Electronics Q3 profit trails Wall Street

(Recasts, adds conference call details)

Oct 23 (Reuters) - Arrow Electronics Inc (ARW.N) reported quarterly earnings below expectations on softness in hardware sales due to financial markets' uncertainty and as price competition increased in components markets, sending its shares down as much as 10 percent.

The electronic parts and computer hardware distributor said its net income for the latest third quarter rose 14.4 percent to $98.3 million, or 79 cents a share, from $85.9 million, or 70 cents a share, a year earlier.

However, after excluding one-time items, the company earned only 76 cents per share against analysts' average expectations of 79 cents, according to Reuters Estimates.

Chief Executive William Mitchell said that the company's product mix hurt profitability as did the cost of new investments.

"It has been reported by major suppliers in this area (that) uncertainty in the capital markets led to end-of-quarter hardware weakness," he said on a conference call.

He said he expected results to return to more normal operating levels in the fourth quarter.

Overall sales for the third quarter rose by about 17 percent to $4.03 billion.

Sales at its enterprise computing solutions business, which provides computing products and services to small- and mid-sized businesses, almost doubled in the quarter from the previous year, helped by several acquisitions, though they declined 8 percent from the June quarter.

But sales of $2.86 billion at its components sales division were flat year-over-year due to continued weakness in its electronics manufacturing services customer base, Mellvile, New York-based Arrow said.

Mitchell said pricing pressures in the component business increased in September due to intensified competition in all regions.

Arrow also forecast fourth-quarter earnings of 90 cents to 95 cents per share, excluding certain items, on revenue of $4.15 billion to $4.45 billion. Analysts were expecting it to earn 92 cents a share, on revenue of $4.27 billion, for the period.

The company said it expects to post global component sales of $2.65 billion to $2.85 billion, and global enterprise computing solutions sales of $1.5 to $1.6 billion for the quarter.

Shares of the company were trading down $3.86 at $38.76 in afternoon trade on the New York Stock Exchange, after touching a low of $38.48. The shares have risen about 35 percent year-to-date before Tuesday's fall. (Reporting by Bijoy Koyitty in Bangalore)