Arrow Electronics' Q3 Earnings Beat Estimates, Revenues Fall Y/Y

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]