Arrow Electronics (ARW) Tops Q1 Earnings & Revenue Estimates

May 14, 2022 Audrey

Arrow Electronics ARW reported impressive first-quarter 2022 results. The company’s adjusted earnings of $5.43 per share beat the Zacks Consensus Estimate of $4.53. The bottom line improved by a whopping 91% on a year-over-year basis.

In the first quarter of 2022, the company reported revenues of $9.07 billion, up 8% from the year-ago quarter. Excluding the impact of unfavorable currency exchange rates, sales increased 10.2%. The top line also surpassed the consensus mark of $8.67 billion.

Arrow Electronics has been witnessing the increasing demand for electronic components and software, cloud and security solutions. However, supply-chain constraints have been limiting its ability to capitalize on the growing demand.

Arrow Electronics, Inc. Price, Consensus and EPS Surprise

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

Segment Details

Adjusted revenues from Global Components increased 13.5% year over year to $7.2 billion. Region-wise, the segment’s revenues from America jumped 37.6% year over year. Adjusted sales from Europe increased 31.1% year over year. Global Components’ sales in the Asia Pacific region were down 7.6% on a year-over-year basis.

Adjusted revenues from Global Enterprise Computing Solutions (“ECS”) came in at $1.88 billion, down 0.9% year over year. Region-wise, the segment’s revenues from America fell 8.8%, while Europe’s revenues increased 11.4%.

The non-GAAP operating income from Global Components and Global ECS were $506 million and $88 million, respectively.

Margins

Arrow Electronics’ non-GAAP gross profit climbed 29.8% to $1.21 billion in the first quarter from the prior-year quarter’s $930.1 million. The non-GAAP gross margin expanded 220 basis points (bps) year over year to 13.3%.

The non-GAAP operating income surged 66.7% to $524.3 million in the January-March 2022 quarter from the year-ago quarter’s $314.5 million. The non-GAAP operating margin grew 200 bps to 5.8%.

Balance Sheet and Cash Flow

Arrow Electronics exited the first quarter with cash and cash equivalents of $242.8 million compared with the previous quarter’s $222.2 million.

The long-term debt was $2.79 billion, higher than $2.24 billion at the end of the fourth quarter of 2021.

The New York-based electronic components distributor used $200.2 million of cash for operating activities during the first quarter. In the first quarter of 2022, ARW returned $264.4 million worth of shares to its shareholders through the stock-repurchase program. It has $513 million remaining under its current share-repurchase authorization.

Guidance

For the second quarter of 2022, sales are estimated between $9.04 billion and $9.64 billion.

Global Components sales are projected in the range of $7.29-$7.59 billion. Global ECS sales are anticipated in the band of $1.75-$2.05 billion.

Interest expenses will presumably be about $36 million. As a result, the company projects non-GAAP earnings per share (EPS) in the range of $5.48-$5.64.

Arrow Electronics expects changes in foreign currencies to decrease second-quarter sales by approximately $300 million and EPS by 20 cents.

Zacks Rank & Stocks to Consider

Arrow Electronics currently carries a Zacks Rank #4 (Sell). Shares of ARW have rallied 5.9% in the past year.

Some better-ranked stocks from

Zacks.com highlighted highlights Marathon Oil, Nutrien, Arrow Electronics, Micron Technology and Teck Assets

April 5, 2022 Audrey

For Instant Launch

Chicago, IL – March 31, 2022 – Stocks in this week’s posting are Marathon Oil Corp. MRO, Nutrien Ltd. NTR, Arrow Electronics Inc. ARW, Micron Engineering MU and Teck Methods Ltd. TECK.

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Marathon

2 Under-the-Radar Industrial Electronics Stocks to Add to Your Watchlist: Arrow and Avnet

March 19, 2022 Audrey

As the U.S. economy witnesses a steady recovery despite heightened geopolitical tensions and deepening supply chain disruptions, industrial production is regaining momentum. This should drive the demand for industrial electronics. Therefore, we think it could be wise to add under-the-radar industrial electronics stocks Arrow Electronics (ARW) and Avnet (AVT) to one’s watchlist. Let’s discuss.

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The U.S. economy continues to recover despite geopolitical tensions generated by Russia’s invasion of Ukraine and deepening supply chain disruptions. The resumption of industrial activities is driving the demand for industrial electronics. In January, industrial production jumped 1.4%, surpassing the 0.5% estimates. Capacity utilization also saw its highest increase after March 2019, rising 77.6%.

Industrial electronics are known to play a vital role in improving the efficiency and productivity of various industries. It deals with power electronic switches, actuators, IEDs, meters, sensors, automation equipment, etc. As industrial production rises, the industrial electronics industry benefits. According to Precedence Research, the power electronics market is expected to grow at a 5.2% CAGR to $37.30 billion by 2030.

Given this backdrop, we think it could be wise to add under-the-radar industrial electronic stocks Arrow Electronics, Inc. (ARW) and Avnet, Inc. (AVT) to your watchlist.

Click here to check out our Industrial Sector Report for 2022

Arrow Electronics, Inc. (ARW)

ARW provides products, services, and solutions to industrial and commercial users of electronic components and enterprise computing solutions. The Centennial, Colo.-based company operates through the Global Components business and the Global Enterprise Computing Solutions (ECS) business.

On Feb. 10, 2022, ARW announced that it had signed an agreement with Finland-based Real-Time Location Systems specialist Quuppa, whose Intelligent Locating System tracks tags and devices within a few centimeters and with millisecond latency. ARW’s VP product management and supplier marketing EMEA, Matthias Hutter, said, “Location services are being adopted across many markets, and the addition of Quuppa’s portfolio gives our customers further choice and flexibility in their product designs.”

ARW’s net sales increased 6.6% year-over-year to $9.01 billion for the fourth quarter, ended Dec. 31, 2021. The company’s non-GAAP net income increased 55.9% year-over-year to $379 million. Also, its non-GAAP EPS came in at $5.37, representing a 69.4% increase year-over-year.

Analysts expect ARW’s EPS for the quarter ending March 31, 2022, to increase 60.2% year-over-year to $4.55. Its revenue for fiscal 2022 is expected to increase 4.9% year-over-year to $36.17 billion. And it surpassed the Street’s EPS estimates in each of the trailing four quarters. Over the past year, the stock has gained 11.6% in price to close the last trading session at $113.88.

ARW’s strong fundamentals are reflected in its POWR Ratings. It has an overall A rating, which equates to a Strong Buy in our proprietary rating system. The POWR Ratings are calculated by considering 118 distinct factors, with each factor weighted to an optimal degree.

It has a B grade for Growth and Value. It is ranked first of 47 stocks in the Technology – Electronics industry. Click