Arrow Electronics ARW reported third-quarter 2024 adjusted earnings of $2.38 per share, which beat the Zacks Consensus Estimate by 6.73%. However, the bottom line declined 42.5% year over year due to lower revenues, cyclical headwinds and unfavorable foreign currency exchange rates. 

In the third quarter, ARW reported revenues of $6.82 billion, down 14.78% from the year-ago quarter’s level. However, the top line beat the Zacks Consensus Estimate by 1.21%.

Find the latest EPS estimates and surprises on Zacks Earnings Calendar.

Arrow Electronics, Inc. Price, Consensus and EPS Surprise

Arrow Electronics, Inc. price-consensus-eps-surprise-chart | Arrow Electronics, Inc. Quote

Third-Quarter Details

In the third quarter of 2024, Global Component sales decreased 20.8% year over year to $4.9 billion, primarily due to the prolonged semiconductor inventory correction. Region-wise, the segment’s revenues from EMEA declined 35.1%, as well as sales from the Americas and Asia-Pacific regions plunged 12.3% and 15.49%, respectively.

Global Enterprise Computing Solutions (ECS) revenues were $1.87 billion, which increased 6.5% year over year. Region-wise, the segment’s revenues from America and EMEA increased 1.6% and 13.17%, respectively. 

The non-GAAP operating income from Global Components and Global ECS was $189 million and $76 million, respectively.

Arrow Electronics’ non-GAAP operating income plunged 43.3% to $215 million in the third quarter of 2024 from the year-ago quarter. The non-GAAP operating margin shrunk 150 basis points to 3.2%.

Balance Sheet and Cash Flow

Arrow Electronics exited the third quarter with cash and cash equivalents of $248 million compared with the previous quarter’s $213 million.

The long-term debt was $2.36 billion, down from $2.48 billion at the end of the previous quarter.

The New York-based electronic component distributor generated $80.55 million in cash from operating activities in the reported quarter. 

In the third quarter of 2024, ARW returned $50 million to its shareholders through share repurchases. It has approximately $375 million remaining under its current share repurchase authorization.

Fourth-Quarter 2024 Guidance

For the fourth quarter of 2024, sales are estimated between $6.67 billion and $7.27 billion.

Global Components sales are projected in the band of $4.5 billion and $4.9 billion. 

Global ECS sales are anticipated to be between $2.17 billion and $2.37 billion.

Interest expenses are expected to be between $60 million and $65 million. As a result, the company projects non-GAAP earnings per share in the band of $2.48-$2.68.

ARW expects changes in foreign currencies to be immaterial for the fourth-quarter sales and earnings.

Zacks Rank & Stocks to Consider

Currently, Arrow Electronics carries a Zacks Rank #3 (Hold).

Monday.com MNDY, Palo Alto Networks PANW and BlackLine BL are some better-ranked stocks that investors can consider in the broader sector. MNDY and BL each sport a Zacks Rank #1 (Strong Buy), while PANW carries a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Shares of MNDY have gained 56.4% year to date. The company is set to report third-quarter 2024 results on Nov. 11.

Shares of PANW have climbed 22.2% year to date. It is slated to report first-quarter fiscal 2025 results on Nov. 20.

Shares of BL have lost 11.3% year to date. The company is set to report third-quarter 2024 results on Nov. 7.

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