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Arrow's (ARW) Q1 Earnings and Revenues Surpass Estimates

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Arrow Electronics (ARW - Free Report) reported solid first-quarter 2021 adjusted earnings per share of $2.84, which beat the Zacks Consensus Estimate by 25.11%. Moreover, the bottom line surged 193% on a year-over-year basis.

Revenues came in at $8.39 billion, up 31% from the year-ago quarter. The top line also beat the consensus mark of $7.98 billion.

The company’s Global Components sales saw growth across all regions. The company also continued to witness impressive demand for software, cloud and security solutions during the first 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 and EPS Surprise

Arrow Electronics, Inc. price-consensus-eps-surprise-chart | Arrow Electronics, Inc. Quote

Segmental Details

Adjusted revenues from Global Components increased 42% year over year to $6.44 billion. Region-wise, the segment’s revenues from the Americas increased 10% year over year. Adjusted sales from Europe increased 10% year over year. Notably, Global Components’ contribution from the Asia Pacific increased a whopping 88%.

Adjusted revenues from Global Enterprise Computing Solutions (ECS) came in at $1.94 billion, up 2% year over year. Region-wise, the segment’s adjusted revenues from the Americas inched up 2%. Global ECS’s contribution from Europe increased 4% on an adjusted basis.

Margins

Arrow’s non-GAAP gross profit grew 27.7% from the prior-year quarter to $930.1 million.

Operating income grew 101% to $314.5 million.

Balance Sheet and Cash Flow

Arrow exited the first quarter with cash and cash equivalents of $227.7 million compared with the previous quarter’s $373.6 million.

Long-term debt reduced from $2.1 billion in the December-end quarter to $1.9 billion in the first quarter.

The company used $4.5 million of cash in operating activities during the first quarter.

In the first quarter, Arrow returned $150 million to shareholders through the stock-repurchase program.

Guidance

For the second quarter of 2021, sales are estimated between $8.1 billion and $8.7 billion.

Global Components sales are projected at $6.3-$6.6 billion. Global ECS sales are estimated to be $1.8-$2.1 billion.

Interest expenses will presumably be about $33 million. As a result, the company projects non-GAAP earnings per share at $2.82-$2.98.

The company expects changes in foreign currencies to increase sales by approximately $150 million year over year in the second quarter and earnings per share by 8 cents year over year.

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 Lam Research Corporation (LRCX - Free Report) , Vishay Intertechnology, Inc. (VSH - Free Report) and LG Display Co., Ltd. (LPL - Free Report) , each sporting a Zacks Rank #1 (Strong Buy), at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Long-term earnings growth rate for Lam Research, Vishay Intertechnology and LG Display is currently projected at 32.8%, 20.26% and 29.8%, respectively.

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