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Arrow Electronics' Q3 Earnings Beat Estimates, Revenues Fall Y/Y
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Arrow Electronics (ARW - Free Report) reported third-quarter 2024 adjusted earnings of $2.38 per share, which beat the Zacks Consensus Estimate by 6.73%. However, the bottom line declined 42.5% year over year due to lower revenues, cyclical headwinds and unfavorable foreign currency exchange rates.
In the third quarter, ARW reported revenues of $6.82 billion, down 14.78% from the year-ago quarter’s level. However, the top line beat the Zacks Consensus Estimate by 1.21%.
In the third quarter of 2024, Global Component sales decreased 20.8% year over year to $4.9 billion, primarily due to the prolonged semiconductor inventory correction. Region-wise, the segment’s revenues from EMEA declined 35.1%, as well as sales from the Americas and Asia-Pacific regions plunged 12.3% and 15.49%, respectively.
Global Enterprise Computing Solutions (ECS) revenues were $1.87 billion, which increased 6.5% year over year. Region-wise, the segment’s revenues from America and EMEA increased 1.6% and 13.17%, respectively.
The non-GAAP operating income from Global Components and Global ECS was $189 million and $76 million, respectively.
Arrow Electronics’ non-GAAP operating income plunged 43.3% to $215 million in the third quarter of 2024 from the year-ago quarter. The non-GAAP operating margin shrunk 150 basis points to 3.2%.
Balance Sheet and Cash Flow
Arrow Electronics exited the third quarter with cash and cash equivalents of $248 million compared with the previous quarter’s $213 million.
The long-term debt was $2.36 billion, down from $2.48 billion at the end of the previous quarter.
The New York-based electronic component distributor generated $80.55 million in cash from operating activities in the reported quarter.
In the third quarter of 2024, ARW returned $50 million to its shareholders through share repurchases. It has approximately $375 million remaining under its current share repurchase authorization.
Fourth-Quarter 2024 Guidance
For the fourth quarter of 2024, sales are estimated between $6.67 billion and $7.27 billion.
Global Components sales are projected in the band of $4.5 billion and $4.9 billion.
Global ECS sales are anticipated to be between $2.17 billion and $2.37 billion.
Interest expenses are expected to be between $60 million and $65 million. As a result, the company projects non-GAAP earnings per share in the band of $2.48-$2.68.
ARW expects changes in foreign currencies to be immaterial for the fourth-quarter sales and earnings.
Zacks Rank & Stocks to Consider
Currently, Arrow Electronics carries a Zacks Rank #3 (Hold).
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Arrow Electronics' Q3 Earnings Beat Estimates, Revenues Fall Y/Y
Arrow Electronics (ARW - Free Report) reported third-quarter 2024 adjusted earnings of $2.38 per share, which beat the Zacks Consensus Estimate by 6.73%. However, the bottom line declined 42.5% year over year due to lower revenues, cyclical headwinds and unfavorable foreign currency exchange rates.
In the third quarter, ARW reported revenues of $6.82 billion, down 14.78% from the year-ago quarter’s level. However, the top line beat the Zacks Consensus Estimate by 1.21%.
Find the latest EPS estimates and surprises on Zacks Earnings Calendar.
Arrow Electronics, Inc. Price, Consensus and EPS Surprise
Arrow Electronics, Inc. price-consensus-eps-surprise-chart | Arrow Electronics, Inc. Quote
Third-Quarter Details
In the third quarter of 2024, Global Component sales decreased 20.8% year over year to $4.9 billion, primarily due to the prolonged semiconductor inventory correction. Region-wise, the segment’s revenues from EMEA declined 35.1%, as well as sales from the Americas and Asia-Pacific regions plunged 12.3% and 15.49%, respectively.
Global Enterprise Computing Solutions (ECS) revenues were $1.87 billion, which increased 6.5% year over year. Region-wise, the segment’s revenues from America and EMEA increased 1.6% and 13.17%, respectively.
The non-GAAP operating income from Global Components and Global ECS was $189 million and $76 million, respectively.
Arrow Electronics’ non-GAAP operating income plunged 43.3% to $215 million in the third quarter of 2024 from the year-ago quarter. The non-GAAP operating margin shrunk 150 basis points to 3.2%.
Balance Sheet and Cash Flow
Arrow Electronics exited the third quarter with cash and cash equivalents of $248 million compared with the previous quarter’s $213 million.
The long-term debt was $2.36 billion, down from $2.48 billion at the end of the previous quarter.
The New York-based electronic component distributor generated $80.55 million in cash from operating activities in the reported quarter.
In the third quarter of 2024, ARW returned $50 million to its shareholders through share repurchases. It has approximately $375 million remaining under its current share repurchase authorization.
Fourth-Quarter 2024 Guidance
For the fourth quarter of 2024, sales are estimated between $6.67 billion and $7.27 billion.
Global Components sales are projected in the band of $4.5 billion and $4.9 billion.
Global ECS sales are anticipated to be between $2.17 billion and $2.37 billion.
Interest expenses are expected to be between $60 million and $65 million. As a result, the company projects non-GAAP earnings per share in the band of $2.48-$2.68.
ARW expects changes in foreign currencies to be immaterial for the fourth-quarter sales and earnings.
Zacks Rank & Stocks to Consider
Currently, Arrow Electronics carries a Zacks Rank #3 (Hold).
Monday.com (MNDY - Free Report) , Palo Alto Networks (PANW - Free Report) and BlackLine (BL - Free Report) are some better-ranked stocks that investors can consider in the broader sector. MNDY and BL each sport a Zacks Rank #1 (Strong Buy), while PANW carries a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Shares of MNDY have gained 56.4% year to date. The company is set to report third-quarter 2024 results on Nov. 11.
Shares of PANW have climbed 22.2% year to date. It is slated to report first-quarter fiscal 2025 results on Nov. 20.
Shares of BL have lost 11.3% year to date. The company is set to report third-quarter 2024 results on Nov. 7.