ARW's Q4 Earnings Beat Estimates, Revenues Fall Y/Y, Shares Down

Core Insights - Arrow Electronics (ARW) shares declined by 2.5% to close at $106.98 following disappointing Q4 2024 results, with adjusted earnings of $2.38 per share, beating estimates by 10.41% but down 25.4% year over year [1][2] Financial Performance - Q4 2024 revenues were reported at $7.28 billion, a decrease of 7.2% year over year, yet this figure surpassed the Zacks Consensus Estimate by 4.09% [2] - Global Component sales fell by 14.6% year over year to $4.81 billion, with EMEA revenues down 24.9%, Americas down 10.1%, and Asia-Pacific down 9.8% at constant currency [3] - Global Enterprise Computing Solutions (ECS) revenues increased by 11.6% year over year to $2.47 billion, with a 12.4% increase at constant currency [3] Operating Metrics - Non-GAAP operating income for Global Components was $173 million, down 39.9% year over year, while Global ECS saw an increase to $161 million, up 10.3% [5] - Overall non-GAAP operating income decreased by 24.8% year over year to $273.7 million, with the operating margin shrinking by 90 basis points to 3.8% [5] Balance Sheet and Cash Flow - Cash and cash equivalents at the end of Q4 were $188.8 million, down from $248 million in the previous quarter, while long-term debt decreased to $2.77 billion from $2.36 billion [6] - Operating cash flow for Q4 2024 was $326 million, and the company returned $50 million to shareholders through share repurchases [6] Guidance - For Q1 2025, sales are projected between $5.98 billion and $6.58 billion, with Global Components sales expected between $4.35 billion and $4.75 billion, and Global ECS sales anticipated between $1.63 billion and $1.83 billion [7] - Non-GAAP earnings are expected to be in the range of $1.30 to $1.50 per share [8] Market Position - Arrow Electronics currently holds a Zacks Rank 3 (Hold), with better-ranked stocks in the sector including Arista Networks (Rank 1), Twilio (Rank 1), and DoorDash (Rank 2) [9]