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Arrow (ARW) Q3 Earnings and Revenues Top Estimates
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Arrow Electronics (ARW - Free Report) reported third-quarter 2020 adjusted earnings per share of $2.08, which beat the Zacks Consensus Estimate $1.66. Moreover, quarterly earnings increased 11.8% on a year-over-year basis.
Revenues came in at $7.23 billion, up 2.2% from the year-ago quarter. Adjusted revenues inched up 1.6% year on year. The revenue figure also beat the consensus mark of $6.67 billion.
The company’s Global Components sales returned to year-over-year growth, reflecting stellar growth in Asia. The company also witnessed impressive demand for software, cloud and security solutions during the third quarter as firms needed to enable business continuity and remote working amid social-distancing measures.
Segmental Details
Adjusted revenues from Global Components increased 5% year over year to $5.31 billion. On a reported basis, revenues improved 5.1%. Region wise, the segment’s adjusted revenues from the Americas decreased 10.4% year over year. Adjusted sales from Europe declined 11.7% year on year. However, Global Components’ contribution from the Asia Pacific increased 29.1% on an adjusted basis.
Arrow Electronics, Inc. Price, Consensus and EPS Surprise
Adjusted revenues from Global Enterprise Computing Solutions (ECS) came in at $1.92 billion, down 6.6% year over year. Region wise, the segment’s adjusted revenues from the Americas slid 10.2% year on year. Nonetheless, Global ECS’s contribution from Europe increased 1.4% on an adjusted basis.
Margins
Arrow’s non-GAAP gross profit edged down 1% from the prior-year quarter to $788.1 million.
Operating income dropped 3.3% to $244.3 million.
Balance Sheet and Cash Flow
Arrow exited the September-end quarter with cash and cash equivalents of $227 million compared with the previous quarter’s $203 million.
Long-term debt remained flat at $2.1 billion.
The company generated operating cash flow of $274.7 million during the third quarter and $1.16 billion during the first nine months of 2020.
In the third quarter, Arrow returned $153 million to shareholders through the stock-repurchase program. During the first three quarters of 2020, it repurchased shares worth $384.8 million. The company, on Jul 30, announced a new share-repurchase program worth $600 million.
Guidance
For the fourth quarter of 2020, sales are estimated between $7.45 billion and $8.05 billion.
Global Components sales are projected at $5.1-$5.4 billion. Global ECS sales are estimated to be $2.35-$2.65 billion.
Interest expenses will presumably be about $33 million. As a result, the company projects non-GAAP earnings per share at $2.57-$2.73.
The long-term earnings growth rate for Zoom, Viasat and CDW is currently pegged at 25%, 19%, and 13.1%, respectively.
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Arrow (ARW) Q3 Earnings and Revenues Top Estimates
Arrow Electronics (ARW - Free Report) reported third-quarter 2020 adjusted earnings per share of $2.08, which beat the Zacks Consensus Estimate $1.66. Moreover, quarterly earnings increased 11.8% on a year-over-year basis.
Revenues came in at $7.23 billion, up 2.2% from the year-ago quarter. Adjusted revenues inched up 1.6% year on year. The revenue figure also beat the consensus mark of $6.67 billion.
The company’s Global Components sales returned to year-over-year growth, reflecting stellar growth in Asia. The company also witnessed impressive demand for software, cloud and security solutions during the third quarter as firms needed to enable business continuity and remote working amid social-distancing measures.
Segmental Details
Adjusted revenues from Global Components increased 5% year over year to $5.31 billion. On a reported basis, revenues improved 5.1%. Region wise, the segment’s adjusted revenues from the Americas decreased 10.4% year over year. Adjusted sales from Europe declined 11.7% year on year. However, Global Components’ contribution from the Asia Pacific increased 29.1% on an adjusted basis.
Arrow Electronics, Inc. Price, Consensus and EPS Surprise
Arrow Electronics, Inc. price-consensus-eps-surprise-chart | Arrow Electronics, Inc. Quote
Adjusted revenues from Global Enterprise Computing Solutions (ECS) came in at $1.92 billion, down 6.6% year over year. Region wise, the segment’s adjusted revenues from the Americas slid 10.2% year on year. Nonetheless, Global ECS’s contribution from Europe increased 1.4% on an adjusted basis.
Margins
Arrow’s non-GAAP gross profit edged down 1% from the prior-year quarter to $788.1 million.
Operating income dropped 3.3% to $244.3 million.
Balance Sheet and Cash Flow
Arrow exited the September-end quarter with cash and cash equivalents of $227 million compared with the previous quarter’s $203 million.
Long-term debt remained flat at $2.1 billion.
The company generated operating cash flow of $274.7 million during the third quarter and $1.16 billion during the first nine months of 2020.
In the third quarter, Arrow returned $153 million to shareholders through the stock-repurchase program. During the first three quarters of 2020, it repurchased shares worth $384.8 million. The company, on Jul 30, announced a new share-repurchase program worth $600 million.
Guidance
For the fourth quarter of 2020, sales are estimated between $7.45 billion and $8.05 billion.
Global Components sales are projected at $5.1-$5.4 billion. Global ECS sales are estimated to be $2.35-$2.65 billion.
Interest expenses will presumably be about $33 million. As a result, the company projects non-GAAP earnings per share at $2.57-$2.73.
Zacks Rank and Other Stocks to Consider
Arrow currently carries a Zacks Rank #2 (Buy).
Some other top-ranked stocks in the broader technology sector include Zoom Video Communications (ZM - Free Report) , Viasat (VSAT - Free Report) and CDW Corporation (CDW - Free Report) , all sporting a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
The long-term earnings growth rate for Zoom, Viasat and CDW is currently pegged at 25%, 19%, and 13.1%, respectively.
Have You Seen Zacks’ 2020 Election Stock Report?
The upcoming election could be a massive buying opportunity for savvy investors. Trillions of dollars will shift into new market sectors after the election. The question is, which sectors will soar for each candidate? Zacks has put together a new special report to help readers like you target big profits.
The 2020 Election Stock Report reveals specific stocks you’ll want to own immediately after the results are announced – 6 if Trump wins, 6 if Biden wins. Past election reports have led investors to gains of +71%, +83%, even +185% in the following months. This year’s picks could be even more lucrative.
Check out Zacks’ 2020 Election Stock Report >>