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Arrow Electronics (ARW) Q2 Earnings Beat, Revenues Fall Y/Y
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Arrow Electronics (ARW - Free Report) reported second-quarter 2024 adjusted earnings of $2.78 per share, which beat the Zacks Consensus Estimate by 28.7%. However, the bottom line declined 36.4% on a year-over-year basis (down 36% at cc) due to lower revenues and unfavorable foreign currency exchange rates.
In the second quarter, ARW reported revenues of $6.89 billion, down 19% from the year-ago quarter’s level (down 19% at cc). However, the top line beat the Zacks Consensus Estimate by 5.91%.
Arrow Electronics, Inc. Price, Consensus and EPS Surprise
In the second quarter of 2024, Global Component sales decreased 25% year over year to $5.03 billion, primarily due to the ongoing semiconductor inventory correction. Region-wise, the segment’s revenues from EMEA declined 33%, as well as sales from the Americas and Asia-Pacific regions plunged 24% and 18%, respectively.
Global Enterprise Computing Solutions (ECS) revenues were $1.86 billion, which increased 2% year over year. Region-wise, the segment’s revenues from America declined 4% but from Europe increased 8%.
The non-GAAP operating income from Global Components and Global ECS was $218 million and $104 million, respectively.
Arrow Electronics’ non-GAAP operating income plunged 36% to $262 million in the second quarter of 2024 from the year-ago quarter. The non-GAAP operating margin shrunk 100 basis points to 3.8%.
Balance Sheet and Cash Flow
Arrow Electronics exited the second quarter with cash and cash equivalents of $213 million compared with the previous quarter’s $242.8 million.
The long-term debt was $2.48 billion, down from $2.63 billion at the end of the previous quarter.
The New York-based electronic component distributor generated $320.18 million in cash from operating activities in the reported quarter.
In the second quarter of 2024, ARW returned $50 million to its shareholders through share repurchases. It has approximately $425 million remaining under its current share repurchase authorization.
Third-Quarter 2024 Guidance
For the third quarter of 2024, sales are estimated between $6.37 billion and $6.97 billion.
Global Components sales are projected in the band of $4.7-$5.1 billion. Global ECS sales are anticipated between $1.67 billion and $1.87 billion.
Interest expenses are expected to be $70 million. As a result, the company projects non-GAAP earnings per share in the band of $2.1-$2.3.
ARW expects changes in foreign currencies to increase third-quarter sales by $30 million and earnings per share by 2 cents on a quarter-over-quarter basis.
Zacks Rank & Stocks to Consider
Currently, Arrow Electronics carries a Zacks Rank #4 (Sell).
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Arrow Electronics (ARW) Q2 Earnings Beat, Revenues Fall Y/Y
Arrow Electronics (ARW - Free Report) reported second-quarter 2024 adjusted earnings of $2.78 per share, which beat the Zacks Consensus Estimate by 28.7%. However, the bottom line declined 36.4% on a year-over-year basis (down 36% at cc) due to lower revenues and unfavorable foreign currency exchange rates.
In the second quarter, ARW reported revenues of $6.89 billion, down 19% from the year-ago quarter’s level (down 19% at cc). However, the top line beat the Zacks Consensus Estimate by 5.91%.
Arrow Electronics, Inc. Price, Consensus and EPS Surprise
Arrow Electronics, Inc. price-consensus-eps-surprise-chart | Arrow Electronics, Inc. Quote
Second-Quarter Details
In the second quarter of 2024, Global Component sales decreased 25% year over year to $5.03 billion, primarily due to the ongoing semiconductor inventory correction. Region-wise, the segment’s revenues from EMEA declined 33%, as well as sales from the Americas and Asia-Pacific regions plunged 24% and 18%, respectively.
Global Enterprise Computing Solutions (ECS) revenues were $1.86 billion, which increased 2% year over year. Region-wise, the segment’s revenues from America declined 4% but from Europe increased 8%.
The non-GAAP operating income from Global Components and Global ECS was $218 million and $104 million, respectively.
Arrow Electronics’ non-GAAP operating income plunged 36% to $262 million in the second quarter of 2024 from the year-ago quarter. The non-GAAP operating margin shrunk 100 basis points to 3.8%.
Balance Sheet and Cash Flow
Arrow Electronics exited the second quarter with cash and cash equivalents of $213 million compared with the previous quarter’s $242.8 million.
The long-term debt was $2.48 billion, down from $2.63 billion at the end of the previous quarter.
The New York-based electronic component distributor generated $320.18 million in cash from operating activities in the reported quarter.
In the second quarter of 2024, ARW returned $50 million to its shareholders through share repurchases. It has approximately $425 million remaining under its current share repurchase authorization.
Third-Quarter 2024 Guidance
For the third quarter of 2024, sales are estimated between $6.37 billion and $6.97 billion.
Global Components sales are projected in the band of $4.7-$5.1 billion. Global ECS sales are anticipated between $1.67 billion and $1.87 billion.
Interest expenses are expected to be $70 million. As a result, the company projects non-GAAP earnings per share in the band of $2.1-$2.3.
ARW expects changes in foreign currencies to increase third-quarter sales by $30 million and earnings per share by 2 cents on a quarter-over-quarter basis.
Zacks Rank & Stocks to Consider
Currently, Arrow Electronics carries a Zacks Rank #4 (Sell).
Some better-ranked stocks from the broader Computer and Technology sector are DigitalOcean (DOCN - Free Report) , Shopify (SHOP - Free Report) and Analog Devices (ADI - Free Report) . While DigitalOcean sports a Zacks Rank #1 (Strong Buy), Shopify and Analog Devices carry a Zacks Rank #2 (Buy) each at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
DigitalOcean’s shares have plunged 15.9% year to date. DOCN is set to report second-quarter 2024 results on Aug 8.
Shopify’s shares have plunged 27.3% year to date. SHOP is set to report its second-quarter 2024 results on Aug 7.
Analog Devices’ shares have gained 7.8% year to date. ADI is set to report third-quarter fiscal 2024 results on Aug 21.