While the proven Zacks Rank places an emphasis on earnings estimates and estimate revisions to find strong stocks, we also know that investors tend to develop their own individual strategies. With this in mind, we are always looking at value, growth, and momentum trends to discover great companies. Looking at the history of these trends, perhaps none is more beloved than value investing. This strategy simply looks to identify companies that are being undervalued by the broader market. Value investors use tr ...

Luis Alvarez Investment summary My previous investment thoughts on Arrow Electronics (NYSE:ARW) (published on 23 May) was a buy rating, as various indicators have pointed to ARW reaching the end of this cycle. I remain buy-rated as the timing of a recovery cycle is getting increasingly visible and, by my estimate, should happen in 4Q24. 2Q24 results update Released a few days ago, ARW once again reported positive results that support my bullish views on the stock. Total revenue was flattish sequentially, co ...

Core Insights - Arrow Electronics reported second-quarter 2024 adjusted earnings of $2.78 per share, exceeding the Zacks Consensus Estimate by 28.7%, but reflecting a 36.4% decline year-over-year due to lower revenues and unfavorable foreign currency exchange rates [1] - Revenues for the second quarter were $6.89 billion, down 19% from the previous year, yet beating the Zacks Consensus Estimate by 5.91% [1] Second-Quarter Details - Global Component sales decreased 25% year-over-year to $5.03 billion, primarily due to ongoing semiconductor inventory correction, with EMEA revenues down 33%, Americas down 24%, and Asia-Pacific down 18% [2] - Global Enterprise Computing Solutions (ECS) revenues increased 2% year-over-year to $1.86 billion, with a 4% decline in America but an 8% increase in Europe [2] - Non-GAAP operating income for Global Components and Global ECS was $218 million and $104 million, respectively, while overall non-GAAP operating income fell 36% to $262 million, with a non-GAAP operating margin of 3.8% [2] Balance Sheet and Cash Flow - At the end of the second quarter, cash and cash equivalents were $213 million, down from $242.8 million in the previous quarter, while long-term debt decreased to $2.48 billion from $2.63 billion [3] - The company generated $320.18 million in cash from operating activities and returned $50 million to shareholders through share repurchases, with approximately $425 million remaining under its current share repurchase authorization [3] Third-Quarter 2024 Guidance - For the third quarter of 2024, sales are estimated to be between $6.37 billion and $6.97 billion, with Global Components sales projected between $4.7 billion and $5.1 billion, and Global ECS sales anticipated between $1.67 billion and $1.87 billion [4] - Interest expenses are expected to be $70 million, with projected non-GAAP earnings per share in the range of $2.1 to $2.3, and anticipated foreign currency changes to increase sales by $30 million and earnings per share by 2 cents quarter-over-quarter [4] Zacks Rank & Stocks to Consider - Arrow Electronics currently holds a Zacks Rank 4 (Sell) [5] - Other stocks in the Computer and Technology sector with better rankings include DigitalOcean (Rank 1), Shopify and Analog Devices (both Rank 2) [5]

Financial Data and Key Metrics Changes - Total revenue for Q2 2024 was $6.9 billion, exceeding the high end of guidance and down 19% year-over-year [7][17] - Non-GAAP earnings per share (EPS) for Q2 2024 was $2.78, significantly higher than the guided range [17][19] - Consolidated gross margin was 12.3%, down approximately 20 basis points sequentially and year-over-year [17] - Non-GAAP operating income was $262 million, representing 3.8% of sales [18] Business Line Data and Key Metrics Changes - Global Components segment sales were $5 billion, down 3% sequentially but better than expected [17] - Enterprise Computing Solutions (ECS) sales were $1.9 billion, up 2% year-over-year due to a favorable product mix [17] - Operating margin for Global Components was 4.3%, while ECS margin was 5.6% on a non-GAAP basis [18] Market Data and Key Metrics Changes - In Asia, revenue grew sequentially in semiconductor and IP&E product lines, with notable growth in China [9][10] - The Americas saw a slight decline, but aerospace and defense remained healthy [9] - EMEA markets continued to decline, particularly in industrial and transportation sectors [10] Company Strategy and Development Direction - The company is focused on value-added offerings, including supply chain management and engineering services, to deepen engagement with suppliers and customers [8] - There is an emphasis on investing in strategic priorities while managing costs and working capital [11][15] - The company is positioning itself for future growth cycles, particularly in AI and cloud-related solutions [14][15] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism about approaching a turning point in core markets, with expectations for stronger performance in the second half of the year [14][15] - The outlook for Q3 indicates typical seasonal patterns, with expectations for stable operating margins [11][22] - Management noted that while conditions are improving, the broader industrial markets remain soft [10][42] Other Important Information - The company reduced net working capital by approximately $150 million in Q2, marking the fourth consecutive quarter of lower net working capital [19][20] - Inventory levels decreased by $140 million from Q1, with a total reduction of $1.2 billion over the last nine months [21] - The company repurchased $50 million of shares in Q2, with a remaining repurchase authorization of approximately $425 million [21] Q&A Session Summary Question: Expectations for stronger second half revenue growth - Management expects better performance in the second half compared to the first half, driven by improvements in the components business and ECS seasonality [25] Question: Specific areas targeted for inventory investments - Management indicated a focus on IP&E as a strategic growth priority while managing working capital carefully [26][27] Question: Revenue guidance for Q4 - Management refrained from providing specific guidance for Q4 but expressed optimism based on improving indicators [32][34] Question: Geo-mix and recovery in China - Management noted sequential growth in Asia, particularly in China, but cautioned that recovery is not V-shaped and remains moderate [38][39] Question: Inventory levels and future demand - Management is confident in the inventory mix and is prepared to invest in areas where demand is expected to improve [44][47] Question: Revenue contribution from AI - Management indicated that while it is too early to quantify AI revenue contributions, they are actively engaged in enabling AI infrastructure [54][55] Question: Drivers for ECS margin growth - ECS margin growth was attributed to business mix, with expectations for normal seasonality impacting margins in Q3 [56] Question: Free cash flow and inventory trends - Management expressed confidence in cash generation capabilities and indicated ongoing investments in inventory as needed [59][63]

Arrow Electronics Earnings Presentation Second Quarter 2024 August 1, 2024 Safe harbor This presentation includes "forward-looking" statements, as the term is defined under the federal securities laws, including but not limited to statements regarding: Arrow's future financial performance, including its outlook on financial results for the third quarter of fiscal 2024 such as sales, net income per diluted share, non-GAAP net income per diluted share, average tax rate, interest and other expense, impact to s ...

Core Viewpoint - Arrow Electronics reported a significant decline in revenue and earnings for the quarter ended June 2024, with revenue at $6.89 billion, down 19.1% year-over-year, and EPS at $2.78, compared to $4.37 in the same quarter last year. However, the revenue exceeded the Zacks Consensus Estimate of $6.51 billion by 5.91%, and EPS surpassed the consensus estimate of $2.16 by 28.70% [1]. Revenue Performance - Americas Components sales were reported at $1.57 billion, exceeding the two-analyst average estimate of $1.49 billion, but reflecting a year-over-year decline of 23.9% [3]. - Europe Components sales were reported at $1.44 billion, slightly below the two-analyst average estimate of $1.47 billion, with a year-over-year decline of 33.2% [4]. - Europe ECS sales were reported at $896.77 million, surpassing the average estimate of $825.01 million, showing a year-over-year increase of 7.9% [5]. - Americas ECS sales were reported at $964.07 million, exceeding the average estimate of $861.50 million, but reflecting a year-over-year decline of 3.6% [6]. - Asia Components sales were reported at $2.02 billion, above the average estimate of $1.85 billion, with a year-over-year decline of 18% [7]. Net Sales and Operating Income - Global ECS net sales were reported at $1.86 billion, exceeding the average estimate of $1.69 billion, with a year-over-year increase of 1.6% [8]. - Global Components net sales were reported at $5.03 billion, surpassing the average estimate of $4.81 billion, but reflecting a year-over-year decline of 24.7% [9]. - Global ECS operating income, as adjusted, was reported at $104 million, exceeding the average estimate of $78.60 million [10]. - Global Components operating income, as adjusted, was reported at $218 million, compared to the average estimate of $202.50 million [11]. Stock Performance - Over the past month, shares of Arrow Electronics have returned +3.4%, outperforming the Zacks S&P 500 composite's +1.1% change, although the stock currently holds a Zacks Rank 4 (Sell), indicating potential underperformance in the near term [11].

Arrow Electronics (ARW) came out with quarterly earnings of $2.78 per share, beating the Zacks Consensus Estimate of $2.16 per share. This compares to earnings of $4.37 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of 28.70%. A quarter ago, it was expected that this electronics maker would post earnings of $2.31 per share when it actually produced earnings of $2.41, delivering a surprise of 4.33%.Over the last four quarters, th ...

Sales Performance - Second-quarter 2024 sales reached $6.9 billion, exceeding guidance, with a year-over-year decrease of 19%[1][3] - Sales for the quarter ended June 29, 2024, were $6,892,868, a decrease of 19.1% compared to $8,514,516 for the same quarter in 2023[23] - Consolidated sales for the quarter ended June 29, 2024, were $6,892,868, a decrease of 19.0% compared to $8,514,516 for the same period in 2023[32] - For the six months ended June 29, 2024, consolidated sales were $13,817,128, reflecting a 19.9% decrease from $17,250,944 in the same period of 2023[34] Income and Earnings - Net income attributable to shareholders for the second quarter was $109 million, down from $237 million in the same quarter last year[3] - Consolidated net income attributable to shareholders for the quarter was $108,698, a decrease of 54.0% compared to $236,559 in the prior year[23] - Basic net income per share for the quarter was $2.03, down from $4.17 in the same quarter last year[23] - The company anticipates a net income per share on a diluted basis of $1.70 to $1.90 for the third quarter[17] - The effective tax rate for the quarter was 21.4%, slightly lower than the 22.4% reported in the previous year[35] - The company reported a diluted net income per share of $2.01 for the quarter, down from $4.12 in the same quarter of 2023[35] Operating Performance - Gross profit for the quarter was $846,444, down 20.6% from $1,066,049 in the prior year[23] - Operating income decreased to $212,275, representing a decline of 46.0% from $392,250 in the same quarter last year[23] - Global components operating income for the quarter was $210,201, down from $381,314, a decline of about 44.8%[47] - Global ECS operating income increased to $102,581 from $86,228, marking a growth of approximately 18.9%[47] - Corporate operating loss for the quarter was $(100,507), compared to $(75,292) in the same quarter last year, indicating a worsening of approximately 33.5%[45] Sales by Segment - Global components sales in the second quarter were $5.0 billion, a 25% decrease year-over-year, with EMEA components down 33%[5] - Global components sales reported for the quarter were $5,032,031, down 24.7% from $6,682,882 year-over-year[32] - Americas components sales decreased by 23.9% to $1,572,840 from $2,066,562 in the prior year[32] - EMEA components sales saw a significant decline of 33.2%, falling to $1,439,494 from $2,153,479[32] - Global enterprise computing solutions (ECS) sales increased by 2% year-over-year to $1.9 billion, with EMEA ECS sales up 8%[8] - Global ECS sales for the quarter were $1,860,837, slightly up from $1,831,634 year-over-year, indicating a growth of about 1.2%[43] Cash Flow and Inventory - Cash flow from operations generated in the second quarter was $320 million, allowing for $50 million in share repurchases[9] - The company reduced inventory levels by approximately $140 million in the second quarter, totaling $1.2 billion over the last nine months[9] - Net cash provided by operating activities for the quarter was $320,181, compared to a net cash used of $(126,804) in the same quarter last year[27] Currency Impact - Changes in foreign currencies negatively impacted sales by approximately $52.2 million and earnings per share by $0.05 compared to the second quarter of 2023[3] Restructuring and Charges - The company incurred restructuring and integration charges of $40.5 million for the second quarter of 2024, compared to $10.3 million in the same quarter of 2023, indicating a significant increase in costs[45] - The company recorded charges of $1.6 million and $12.1 million in inventory write-downs related to the wind down of a business for the second quarter and first six months of 2024, respectively[43]

Arrow Electronics (ARW) has announced a groundbreaking data-communication reference design for electric vehicle (EV) charging, potentially revolutionizing the EV supply equipment (EVSE) market. This development comes at a crucial time as the automotive industry continues its rapid shift toward electrification.The new reference design combines advanced software stacks for cutting-edge protocols with a HomePlug Green PHY hardware module. This integration is set to significantly reduce time-to-market for EVSE ...

Arrow Electronics (ARW) has unveiled an innovative AI-powered steering system that promises to redefine the future of vehicle control in a groundbreaking development for mobility technology.This cutting-edge system, designed for ARW's Semi-Autonomous Mobility Car, utilizes facial recognition technology and is built around an advanced NVIDIA processor.The new steering mechanism was tested by quadriplegic racecar driver Sam Schmidt, who successfully maneuvered the vehicle at competitive speeds using only head ...