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Arrow (ARW) Q4 Earnings and Revenues Top Estimates
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Arrow Electronics (ARW - Free Report) reported fourth-quarter 2020 adjusted earnings per share of $3.17, which beat the Zacks Consensus Estimate by 19.62%. Moreover, the bottom line increased 44.1% on a year-over-year basis.
Revenues came in at $8.45 billion, up 15% from the year-ago quarter. The top line also beat the consensus mark of $7.77 billion.
The company’s Global Components sales saw stellar growth in Asia, and improved growth in Europe. The company also continued to witness impressive demand for software, cloud and security solutions during the fourth quarter as firms needed to enable business continuity and remote working amid social distancing measures.
Arrow Electronics, Inc. Price, Consensus and EPS Surprise
Adjusted revenues from Global Components increased 25% year over year to $5.92 billion. On an adjusted basis, revenues improved 23%. Region wise, the segment’s adjusted revenues from the Americas remained flat. Adjusted sales from Europe increased 7% year over year. Notably, Global Components’ contribution from the Asia Pacific increased 53% on an adjusted basis.
Adjusted revenues from Global Enterprise Computing Solutions (ECS) came in at $2.53 billion, down 5% year over year. Region wise, the segment’s adjusted revenues from the Americas slid 10%. Nonetheless, Global ECS’s contribution from Europe increased 2% on an adjusted basis.
Margins
Arrow’s non-GAAP gross profit grew 11.4% from the prior-year quarter to $923.65 million.
Operating income grew 18% to $335.87 million.
Balance Sheet and Cash Flow
Arrow exited the December quarter with cash and cash equivalents of $373.62 million compared with the previous quarter’s $227 million.
Long-term debt remained flat at $2.1 billion sequentially.
The company generated operating cash flow of $200 million during the fourth quarter and $1.36 billion in the full year of 2020.
In the fourth quarter, Arrow returned $100 million to shareholders through the stock-repurchase program. In the full year, it repurchased shares worth $475 million. Notably, the company reduced its debt by $715 million during the year.
Full-Year Details
In full-year 2020, Arrow recorded adjusted sales of $28.67 billion, down 1% year over year. Non-GAAP earnings of $7.75 per share increased 2.65%.
Guidance
For the first quarter of 2021, sales are estimated between $7.63 billion and $8.23 billion.
Global Components sales are projected at $5.83-$6.13 billion. Global ECS sales are estimated to be $1.80-$2.10 billion.
Interest expenses will presumably be about $31 million. As a result, the company projects non-GAAP earnings per share at $2.17-$2.33.
The long-term earnings growth rate for Apple, Zoom Video Communications and Shopify is currently pegged at 11.5%, 25%, and 32.5%, respectively.
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Arrow (ARW) Q4 Earnings and Revenues Top Estimates
Arrow Electronics (ARW - Free Report) reported fourth-quarter 2020 adjusted earnings per share of $3.17, which beat the Zacks Consensus Estimate by 19.62%. Moreover, the bottom line increased 44.1% on a year-over-year basis.
Revenues came in at $8.45 billion, up 15% from the year-ago quarter. The top line also beat the consensus mark of $7.77 billion.
The company’s Global Components sales saw stellar growth in Asia, and improved growth in Europe. The company also continued to witness impressive demand for software, cloud and security solutions during the fourth quarter as firms needed to enable business continuity and remote working amid social distancing measures.
Arrow Electronics, Inc. Price, Consensus and EPS Surprise
Arrow Electronics, Inc. price-consensus-eps-surprise-chart | Arrow Electronics, Inc. Quote
Segmental Details
Adjusted revenues from Global Components increased 25% year over year to $5.92 billion. On an adjusted basis, revenues improved 23%. Region wise, the segment’s adjusted revenues from the Americas remained flat. Adjusted sales from Europe increased 7% year over year. Notably, Global Components’ contribution from the Asia Pacific increased 53% on an adjusted basis.
Adjusted revenues from Global Enterprise Computing Solutions (ECS) came in at $2.53 billion, down 5% year over year. Region wise, the segment’s adjusted revenues from the Americas slid 10%. Nonetheless, Global ECS’s contribution from Europe increased 2% on an adjusted basis.
Margins
Arrow’s non-GAAP gross profit grew 11.4% from the prior-year quarter to $923.65 million.
Operating income grew 18% to $335.87 million.
Balance Sheet and Cash Flow
Arrow exited the December quarter with cash and cash equivalents of $373.62 million compared with the previous quarter’s $227 million.
Long-term debt remained flat at $2.1 billion sequentially.
The company generated operating cash flow of $200 million during the fourth quarter and $1.36 billion in the full year of 2020.
In the fourth quarter, Arrow returned $100 million to shareholders through the stock-repurchase program. In the full year, it repurchased shares worth $475 million. Notably, the company reduced its debt by $715 million during the year.
Full-Year Details
In full-year 2020, Arrow recorded adjusted sales of $28.67 billion, down 1% year over year. Non-GAAP earnings of $7.75 per share increased 2.65%.
Guidance
For the first quarter of 2021, sales are estimated between $7.63 billion and $8.23 billion.
Global Components sales are projected at $5.83-$6.13 billion. Global ECS sales are estimated to be $1.80-$2.10 billion.
Interest expenses will presumably be about $31 million. As a result, the company projects non-GAAP earnings per share at $2.17-$2.33.
Zacks Rank and Stocks to Consider
Arrow currently carries a Zacks Rank #3 (Hold).
Better-ranked stocks in the broader technology sector include Apple Inc. (AAPL - Free Report) , Zoom Video Communications (ZM - Free Report) and Shopify (SHOP - 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 Apple, Zoom Video Communications and Shopify is currently pegged at 11.5%, 25%, and 32.5%, respectively.
Breakout Biotech Stocks with Triple-Digit Profit Potential
The biotech sector is projected to surge beyond $775 billion by 2024 as scientists develop treatments for thousands of diseases. They’re also finding ways to edit the human genome to literally erase our vulnerability to these diseases.
Zacks has just released Century of Biology: 7 Biotech Stocks to Buy Right Now to help investors profit from 7 stocks poised for outperformance. Our recent biotech recommendations have produced gains of +50%, +83% and +164% in as little as 2 months. The stocks in this report could perform even better.
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