Core Viewpoint - Arrow Electronics reported quarterly earnings of $2.97 per share, exceeding the Zacks Consensus Estimate of $2.69 per share, but down from $3.98 per share a year ago, indicating a 25.4% year-over-year decline in earnings [1][2] Financial Performance - The company achieved revenues of $7.28 billion for the quarter ended December 2024, surpassing the Zacks Consensus Estimate by 4.09%, but down from $7.85 billion in the same quarter last year, reflecting a 7.3% year-over-year decrease [2] - Over the last four quarters, Arrow Electronics has consistently surpassed consensus EPS estimates four times and topped revenue estimates three times [2] Stock Performance and Outlook - Arrow Electronics shares have increased by approximately 1.6% since the beginning of the year, while the S&P 500 has gained 3.1%, indicating underperformance relative to the broader market [3] - The company's current consensus EPS estimate for the upcoming quarter is $2.26 on revenues of $6.53 billion, and for the current fiscal year, it is $12.81 on revenues of $27.82 billion [7] Industry Context - The Electronics - Parts Distribution industry, to which Arrow Electronics belongs, is currently ranked in the bottom 7% of over 250 Zacks industries, suggesting potential challenges ahead [8] - The performance of Arrow Electronics may be influenced by the overall outlook for the industry, as research indicates that the top 50% of Zacks-ranked industries outperform the bottom 50% by more than 2 to 1 [8]

Financial Performance - Fourth-quarter consolidated sales were $7.283 billion, a decrease of 7% year over year, while full-year sales decreased 16% to $27.923 billion[3][4] - Fourth-quarter net income attributable to shareholders was $99 million, with a diluted earnings per share of $1.86, down from $195 million and $3.54 in the same quarter last year[3][4] - Non-GAAP net income for the fourth quarter was $158 million, resulting in a non-GAAP diluted earnings per share of $2.97, compared to $219 million and $3.98 in Q4 2023[3][4] - Consolidated net income for the year was $393,507, representing a 56.7% decrease from $909,363 in 2023[22] - For the year ended December 31, 2024, consolidated net income attributable to shareholders was $567,857,000, a decrease from $976,603,000 in 2023, representing a decline of approximately 42%[38] - Net income per diluted share for the year ended December 31, 2024, was $10.56, a decrease from $17.12 in 2023, reflecting a decline of approximately 38%[38] Sales Performance - Global components sales in Q4 2024 were $4.814 billion, a 15% decrease year over year, while full-year sales were $19.983 billion, down 21% from 2023[6][4] - Global enterprise computing solutions (ECS) sales increased 12% year over year in Q4 2024, reaching $2.469 billion, with full-year sales of $7.940 billion, up 3% from 2023[7][4] - Sales for the quarter ended December 31, 2024, were $7,282,877, a decrease of 7.2% compared to $7,849,157 for the same period in 2023[22] - For the year ended December 31, 2024, consolidated sales were $27,923,324, a decline of 15.7% from $33,107,120 in 2023[34] - Global components sales for Q4 2024 were $4,813,760, down 14.6% from $5,636,032 in Q4 2023[32] - EMEA ECS sales increased by 22.4% in Q4 2024 to $1,306,890, compared to $1,067,371 in Q4 2023[32] Income and Profitability - Gross profit for the year ended December 31, 2024, was $3,292,408, down 20.7% from $4,149,018 in 2023[22] - Operating income for the quarter decreased to $195,103, a decline of 38.3% from $316,679 in the prior year[22] - Operating income for the year ended December 31, 2024, was $768,557,000, down from $1,471,164,000 in 2023, indicating a decrease of about 48%[38] - Global components non-GAAP operating income for the year ended December 31, 2024, was $827,142,000, compared to $1,485,666,000 in 2023, a decrease of approximately 44%[46] - The gross profit margin for global components as reported was 10.3% for the year ended December 31, 2024, down from 12.5% in 2023[46] Cash Flow and Investments - The company generated over $1.1 billion in cash flow from operations in 2024 and reduced inventory by $1.1 billion compared to prior peak levels[8] - Net cash provided by operating activities for the quarter was $326,464, an increase from $286,742 in the same quarter of 2023[26] - The company reported a net cash used for investing activities of $41,416, compared to $25,510 in the prior year[26] Future Outlook - For Q1 2025, the company expects consolidated sales between $5.98 billion and $6.58 billion, with global components sales projected at $4.35 billion to $4.75 billion[11] - The impact of foreign currency changes is expected to decrease Q1 2025 sales by approximately $138 million and earnings per share by $0.13 compared to Q1 2024[11] - The average tax rate for Q1 2025 is anticipated to be in the range of 23% to 25%[11] Taxation - The effective tax rate for Q4 2024 was 22.4%, slightly higher than the 21.5% reported in Q4 2023[36] - The effective tax rate for the year ended December 31, 2024, was 19.6%, compared to 21.9% in 2023, reflecting a slight improvement[38] Shareholder Returns - The company returned $250 million to shareholders through stock repurchases during 2024[8]

Core Viewpoint - Analysts expect Arrow Electronics to report quarterly earnings of $2.69 per share, reflecting a year-over-year decline of 32.4%, with revenues projected at $7 billion, down 10.9% from the previous year [1] Earnings Estimates - Changes in earnings estimates are crucial for predicting investor reactions, with empirical studies showing a strong correlation between earnings estimate revisions and short-term stock performance [2] Key Metrics Projections - Analysts predict 'Net Sales- Global ECS' at $2.25 billion, indicating a year-over-year increase of 1.5% [4] - 'Net Sales- Global components' is estimated at $4.75 billion, reflecting a decline of 15.7% year-over-year [4] - 'Geographic Revenue- Americas Components' is projected to reach $1.57 billion, down 11.9% from the previous year [4] - 'Geographic Revenue- EMEA' is expected at $2.28 billion, suggesting a year-over-year decrease of 17.2% [5] - 'Geographic Revenue- Europe ECS' is forecasted to be $1.11 billion, indicating a 4.4% increase from the prior year [5] - 'Geographic Revenue- Europe components' is estimated at $1.21 billion, reflecting a decline of 28.1% year-over-year [5] - 'Geographic Revenue- Asia components' is projected at $1.97 billion, down 9.1% year-over-year [6] - 'Geographic Revenue- Americas ECS' is expected to be $1.11 billion, indicating a decrease of 3.1% from the previous year [6] - 'Geographic Revenue- Asia Pacific' is forecasted at $2.03 billion, reflecting a decline of 6.3% year-over-year [7] Operating Income Estimates - 'Global ECS non-GAAP operating income' is expected to be $150.20 million, compared to $146.11 million reported in the same quarter last year [7] - 'Global components non-GAAP operating income' is projected at $169.80 million, down from $287.70 million reported in the same quarter last year [8] Stock Performance - Arrow Electronics shares have changed by +0.3% in the past month, compared to a +1.7% increase in the Zacks S&P 500 composite [8]

Core Insights - Arrow Electronics, Inc. (NYSE: ARW) is set to report its Q4 and full-year 2024 results on February 4th, with expectations for the quarter being analyzed [1] Company Overview - The company is focused on maintaining a long-term investment horizon, typically between 5 to 10 years, and emphasizes a portfolio that includes a mix of growth, value, and dividend-paying stocks, with a particular focus on value [1]

Group 1 - The investment approach focuses on long-term investments while incorporating short-term shorts to uncover alpha opportunities [1] - The analysis is based on bottom-up evaluation, emphasizing the fundamental strengths and weaknesses of individual companies [1] - The goal is to identify companies with solid fundamentals, sustainable competitive advantages, and growth potential [1]

Core Insights - Arrow Electronics reported third-quarter 2024 adjusted earnings of $2.38 per share, exceeding the Zacks Consensus Estimate by 6.73%, but reflecting a 42.5% decline year over year due to lower revenues and unfavorable market conditions [1] - Total revenues for the quarter were $6.82 billion, down 14.78% from the previous year, yet still surpassing the Zacks Consensus Estimate by 1.21% [1] Revenue Breakdown - Global Component sales fell 20.8% year over year to $4.9 billion, primarily due to a prolonged semiconductor inventory correction, with EMEA revenues declining 35.1%, Americas down 12.3%, and Asia-Pacific down 15.49% [3] - Global Enterprise Computing Solutions (ECS) revenues increased 6.5% year over year to $1.87 billion, with revenue growth in America and EMEA at 1.6% and 13.17%, respectively [4] Operating Income and Margins - Non-GAAP operating income for Arrow Electronics decreased 43.3% to $215 million, with a non-GAAP operating margin shrinking by 150 basis points to 3.2% [5] Financial Position - The company ended the quarter with cash and cash equivalents of $248 million, an increase from $213 million in the previous quarter, while long-term debt decreased to $2.36 billion from $2.48 billion [6] - Arrow generated $80.55 million in cash from operating activities during the quarter [6] Shareholder Returns - In the third quarter, Arrow returned $50 million to shareholders through share repurchases, with approximately $375 million remaining under its current share repurchase authorization [7] Fourth-Quarter Guidance - For the fourth quarter of 2024, Arrow expects sales between $6.67 billion and $7.27 billion, with Global Components sales projected between $4.5 billion and $4.9 billion, and Global ECS sales anticipated between $2.17 billion and $2.37 billion [8] - Interest expenses are expected to range from $60 million to $65 million, with projected non-GAAP earnings per share between $2.48 and $2.68 [8] Currency Impact - The company anticipates that changes in foreign currencies will have an immaterial effect on fourth-quarter sales and earnings [9]

Financial Data and Key Metrics Changes - Consolidated sales for Q3 2024 were $6.8 billion, down 15% year-over-year, but above the midpoint of guidance [21] - Non-GAAP earnings per share for Q3 2024 were $2.38, exceeding the high end of the guided range [25] - Gross margin for Q3 2024 was 11.5%, down approximately 80 basis points sequentially [22] - Non-GAAP operating income was $215 million, representing 3.2% of sales [25] Business Line Data and Key Metrics Changes - Global Components sales were $4.9 billion, down 2% sequentially [21] - Enterprise Computing Solutions (ECS) sales were $1.9 billion, up 7% year-over-year due to favorable product mix [21] - Operating margins for Global Components were 3.9% and for ECS were 4.1%, both on a non-GAAP basis [25] Market Data and Key Metrics Changes - In Asia, there was mixed growth, with stability overall and modest growth in the automotive sector, particularly in China [11] - The Americas saw sequential growth driven by aerospace and defense, while EMEA experienced a broad-based decline [12] - Book-to-bill ratios remained below one overall, with Asia leading the way [33] Company Strategy and Development Direction - The company is focused on supply chain management and design services, expanding centers of excellence in automotive and robotics [19] - In ECS, the ArrowSphere platform is central to the go-to-market model, enhancing customer base and recurring revenue streams [20] - The company plans to reduce annual operating expenses by approximately $90 million to $100 million by 2026, with a focus on geographic realignment [23] Management's Comments on Operating Environment and Future Outlook - Management indicated that the market correction in the components business is more prolonged than expected, with excess inventory levels persisting [10] - The outlook for Q4 reflects ongoing market trends, with expectations of some fluctuations across regions and verticals [15] - Management remains optimistic about the eventual recovery but acknowledges the difficulty in predicting the timing [16] Other Important Information - The company generated $81 million in cash flow from operations in Q3 2024, marking the fifth consecutive quarter of positive cash flow [27] - Net debt at the end of Q3 2024 was $3 billion, lower compared to Q2 [27] - The company plans to exit certain underperforming non-core business lines, estimating approximately $50 million in additional costs [24] Q&A Session Summary Question: Guidance for components and regional performance - Management clarified that Asia is expected to be flat while Western markets may see declines in high single digits [32] Question: Book-to-bill ratios and regional performance - Management confirmed that book-to-bill ratios are below one overall, with Asia performing better [33] Question: Gross margin recovery timeline - Management indicated that gross margins are expected to normalize as the market improves, but timing remains uncertain [36] Question: Customer mix and market recovery - Management noted that recovery typically occurs first in Asia, followed by North America and Europe, with larger customers recovering before smaller ones [40] Question: Asia demand compared to competitors - Management reported modest growth in China, particularly in the EV market, but noted that recovery in the broader industrial mass market has been slower [49] Question: Operating expenses and cost reduction plans - Management confirmed that the $90 million to $100 million in savings is net and will be spread across the organization [50] Question: Product lines performance in ECS - Management highlighted strong growth in hybrid cloud and infrastructure software, contributing to operating margin growth [54] Question: Pricing environment and future concerns - Management stated that pricing remains stable, with no significant reductions from suppliers expected [71] Question: Free cash flow and capital allocation - Management emphasized that the business model remains focused on generating cash, with plans for stock buybacks when appropriate [75]

For the quarter ended September 2024, Arrow Electronics (ARW) reported revenue of $6.82 billion, down 14.8% over the same period last year. EPS came in at $2.38, compared to $4.14 in the year-ago quarter. The reported revenue represents a surprise of +1.21% over the Zacks Consensus Estimate of $6.74 billion. With the consensus EPS estimate being $2.23, the EPS surprise was +6.73%. While investors closely watch year-over-year changes in headline numbers -- revenue and earnings -- and how they compare to Wall ...

Arrow Electronics (ARW) came out with quarterly earnings of $2.38 per share, beating the Zacks Consensus Estimate of $2.23 per share. This compares to earnings of $4.14 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of 6.73%. A quarter ago, it was expected that this electronics maker would post earnings of $2.16 per share when it actually produced earnings of $2.78, delivering a surprise of 28.70%. Over the last four quarters, ...

ARROW ELECTRONICS, INC. 9151 EAST PANORAMA CIRCLE CENTENNIAL, CO 80112 303-824-4000 NEWS Exhibit 99.1 Arrow Electronics Reports Third-Quarter 2024 Results -- Sales of $6.8 billion, at high-end of guidance range -- -- Third-Quarter Earnings Per Diluted Share of $1.88; Non-GAAP Earnings Per Diluted Share of $2.38 -- CENTENNIAL, Colo.--(BUSINESS WIRE)- Oct. 31, 2024--Arrow Electronics, Inc. (NYSE:ARW) today announced financial results for its third quarter of 2024. "In the third quarter, the company continued ...