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Arrow Electronics (ARW) Q1 Earnings Beat, Revenues Fall Y/Y
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Arrow Electronics (ARW - Free Report) reported first-quarter 2024 adjusted earnings of $2.41 per share, which beat the Zacks Consensus Estimate by 4.33%. However, the bottom line declined 30% on a year-over-year basis (down 48% at cc) due to lower revenues and unfavorable foreign currency exchange rates.
In the first quarter, ARW reported revenues of $6.92 billion, down 21% from the year-ago quarter’s level (down 21% at cc). The top line missed the Zacks Consensus Estimate by 1.1% due to the adverse impact of foreign exchange rates.
Arrow Electronics, Inc. Price, Consensus and EPS Surprise
In the first quarter of 2024, Global Component sales decreased 24% year over year to $5.2 billion, primarily due to the ongoing semiconductor inventory correction. Region-wise, the segment’s revenues from EMEA declined 26%, while sales from the Americas and Asia-Pacific regions plunged 29% and 18%, respectively.
Global Enterprise Computing Solutions (ECS) revenues were $1.7 billion, which decreased 8% year over year. Region-wise, the segment’s revenues from America and Europe declined 9% and 7%, respectively.
The non-GAAP operating income from Global Components and Global ECS was $243 million and $73 million, respectively.
Arrow Electronics’ non-GAAP operating income plunged 42% to $251 million in the first quarter of 2024 from the year-ago quarter. The non-GAAP operating margin shrunk 140 basis points to 3.6%.
Balance Sheet and Cash Flow
Arrow Electronics exited the first quarter with cash and cash equivalents of $242.8 million compared with the previous quarter’s $218.05 million.
The long-term debt was $2.63 billion, down from $2.15 billion at the end of the previous quarter.
The New York-based electronic component distributor generated $403.2 million in cash from operating activities in the reported quarter.
In the first quarter of 2024, ARW returned $100 million to its shareholders through share repurchases. It has approximately $475.4 million remaining under its current share repurchase authorization.
Second-Quarter 2024 Guidance
For the second quarter of 2024, sales are estimated between $6.2 billion and $6.8 billion.
Global Components sales are projected in the band of $4.6-$5 billion. Global ECS sales are anticipated between $1.6 billion and $1.8 billion.
Interest expenses are expected to be $75 million. As a result, the company projects non-GAAP diluted earnings per share in the band of $2.05-$2.25.
ARW expects changes in foreign currencies to decrease second-quarter sales by $29 million and earnings per share by 4 cents on a quarter-over-quarter basis.
Zacks Rank & Stocks to Consider
Currently, Arrow Electronics carries a Zacks Rank #3 (Hold).
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Arrow Electronics (ARW) Q1 Earnings Beat, Revenues Fall Y/Y
Arrow Electronics (ARW - Free Report) reported first-quarter 2024 adjusted earnings of $2.41 per share, which beat the Zacks Consensus Estimate by 4.33%. However, the bottom line declined 30% on a year-over-year basis (down 48% at cc) due to lower revenues and unfavorable foreign currency exchange rates.
In the first quarter, ARW reported revenues of $6.92 billion, down 21% from the year-ago quarter’s level (down 21% at cc). The top line missed the Zacks Consensus Estimate by 1.1% due to the adverse impact of foreign exchange rates.
Arrow Electronics, Inc. Price, Consensus and EPS Surprise
Arrow Electronics, Inc. price-consensus-eps-surprise-chart | Arrow Electronics, Inc. Quote
First-Quarter Details
In the first quarter of 2024, Global Component sales decreased 24% year over year to $5.2 billion, primarily due to the ongoing semiconductor inventory correction. Region-wise, the segment’s revenues from EMEA declined 26%, while sales from the Americas and Asia-Pacific regions plunged 29% and 18%, respectively.
Global Enterprise Computing Solutions (ECS) revenues were $1.7 billion, which decreased 8% year over year. Region-wise, the segment’s revenues from America and Europe declined 9% and 7%, respectively.
The non-GAAP operating income from Global Components and Global ECS was $243 million and $73 million, respectively.
Arrow Electronics’ non-GAAP operating income plunged 42% to $251 million in the first quarter of 2024 from the year-ago quarter. The non-GAAP operating margin shrunk 140 basis points to 3.6%.
Balance Sheet and Cash Flow
Arrow Electronics exited the first quarter with cash and cash equivalents of $242.8 million compared with the previous quarter’s $218.05 million.
The long-term debt was $2.63 billion, down from $2.15 billion at the end of the previous quarter.
The New York-based electronic component distributor generated $403.2 million in cash from operating activities in the reported quarter.
In the first quarter of 2024, ARW returned $100 million to its shareholders through share repurchases. It has approximately $475.4 million remaining under its current share repurchase authorization.
Second-Quarter 2024 Guidance
For the second quarter of 2024, sales are estimated between $6.2 billion and $6.8 billion.
Global Components sales are projected in the band of $4.6-$5 billion. Global ECS sales are anticipated between $1.6 billion and $1.8 billion.
Interest expenses are expected to be $75 million. As a result, the company projects non-GAAP diluted earnings per share in the band of $2.05-$2.25.
ARW expects changes in foreign currencies to decrease second-quarter sales by $29 million and earnings per share by 4 cents on a quarter-over-quarter basis.
Zacks Rank & Stocks to Consider
Currently, Arrow Electronics carries a Zacks Rank #3 (Hold).
Some better-ranked stocks from the broader Computer and Technology sector are Arista Networks (ANET - Free Report) , NVIDIA (NVDA - Free Report) and Dell Technologies (DELL - Free Report) , each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Shares of Arista Networks have risen 11.6% year to date. ANET is set to report first-quarter 2024 results on May 7.
Shares of NVIDIA have surged 74.5% year to date. NVDA is slated to report first-quarter 2024 results on May 22.
Shares of Dell Technologies have rallied 62.1% year to date. DELL is set to report first-quarter fiscal 2025 results on May 30.