Arrow Electronics Reports Second-Quarter 2024 Results

Rhea-AI Summary

Arrow Electronics (NYSE:ARW) reported Q2 2024 financial results, with sales of $6.9 billion, exceeding guidance. Earnings per diluted share were $2.01, while non-GAAP earnings per diluted share reached $2.78. Global Components sales decreased 25% year-over-year to $5.032 billion, while Global Enterprise Computing Solutions (ECS) sales increased 2% to $1.861 billion. The company generated $320 million in cash flow from operations and repurchased $50 million in shares. For Q3 2024, Arrow expects consolidated sales between $6.37 billion and $6.97 billion, with non-GAAP earnings per diluted share projected at $2.10 to $2.30.

Positive

• Sales of $6.9 billion exceeded guidance
• Non-GAAP earnings per diluted share of $2.78
• Global ECS sales increased 2% year-over-year
• Generated $320 million in cash flow from operations
• Reduced inventory levels by $140 million in Q2, $1.2 billion over last nine months

Negative

• Global Components sales decreased 25% year-over-year
• Overall sales decreased 19% year-over-year
• Americas ECS sales decreased 4% year-over-year
• Net income attributable to shareholders decreased from $237 million in Q2 2023 to $109 million in Q2 2024

Financial Analyst

Arrow Electronics' Q2 2024 results demonstrate resilience in a challenging market environment. With sales of $6.9 billion, the company exceeded guidance, showcasing its ability to navigate industry headwinds. The non-GAAP earnings per diluted share of $2.78 also surpassed expectations, indicating effective cost management and operational efficiency.

Key points to consider:

• Global Components sales declined 25% year-over-year, reflecting ongoing softness in automotive and industrial markets. However, improving book-to-bill ratios and sequential growth in bookings suggest a potential turnaround.
• Global Enterprise Computing Solutions (ECS) saw a 2% year-over-year increase in sales, driven by the transition to IT as a service and strong performance in EMEA.
• Working capital management has been impressive, with inventory reduced by $1.2 billion over the past nine months, enhancing financial flexibility.
• Cash flow from operations of $320 million enabled $50 million in share repurchases, demonstrating a balanced approach to capital allocation.

The Q3 2024 outlook suggests continued caution, with projected sales of $6.37 billion to $6.97 billion. While this indicates ongoing market challenges, Arrow's strategic positioning in high-growth areas like IT as a service could provide a buffer against industry volatility.

Market Research Analyst

Arrow's Q2 results offer valuable insights into the broader technology components and enterprise computing markets. The 25% decline in Global Components sales reflects a significant industry-wide correction, particularly in automotive and industrial sectors. However, the company's observation of "signs of incremental improvement in leading indicators" suggests we may be approaching the tail end of this cyclical downturn.

On the enterprise computing front, Arrow's 2% growth in ECS sales, despite overall market challenges, underscores the accelerating shift towards IT as a service models. This trend is likely to persist, offering a potential growth avenue for companies well-positioned in this space.

Regionally, EMEA showed resilience in both components and ECS segments, outperforming other regions. This could indicate a more robust tech spending environment in Europe compared to other markets.

The improving book-to-bill ratios across all regions are a positive signal for future demand. If this trend continues, it could herald a broader recovery in the technology supply chain, potentially benefiting not just Arrow but the entire sector.

Investors should monitor these trends closely, as they may provide early indicators of a tech sector rebound, particularly in components and enterprise IT solutions.

-- Sales of $6.9 billion, exceeding guidance --

-- Second-Quarter Earnings Per Diluted Share of $2.01; Non-GAAP Earnings Per Diluted Share of $2.78 --

CENTENNIAL, Colo.--(BUSINESS WIRE)-- Arrow Electronics, Inc. (NYSE:ARW) today announced financial results for its second quarter of 2024.

“We continued to execute well in an evolving market environment, delivering second-quarter sales and non-GAAP earnings per diluted share comfortably ahead of our guided ranges,” said Sean Kerins, Arrow’s president and chief executive officer.

“In addition, our value-added offerings in global components as well as better momentum in enterprise computing solutions contributed to our overall operating margin stability in the quarter,” said Mr. Kerins.

Arrow Consolidated
		Quarter Ended						Six Months Ended
		June 29,			July 1,			June 29,			July 1,
(in millions except per share data)		2024			2023			2024			2023
Consolidated sales		$	6,893		$	8,515		$	13,817		$	17,251
Net income attributable to shareholders			109			237			192			510
Net income per diluted share			2.01			4.12			3.53			8.74
Non-GAAP net income attributable to shareholders (1)			150			251			282			524
Non-GAAP net income per diluted share			2.78			4.37			5.18			8.98

Both GAAP and non-GAAP earnings per share in the second quarter of 2024 include a $0.29 benefit and a $20 million operating income benefit related to the collection of certain aged receivables related to one customer in the ECS segment. In the second quarter of 2024, sales decreased 19 percent year over year. Changes in foreign currencies had a negative impact on growth of approximately $52.2 million on sales and $0.05 on earnings per share on a diluted basis compared to the second quarter of 2023.

Global Components

“Across many of the segments in which we compete, we’re seeing signs of incremental improvement in leading indicators, with book-to-bill ratios advancing across all regions and bookings growing sequentially. Though the automotive and broader industrial markets are still experiencing softness, we now believe we’re in the later stages of the industry’s cyclical correction,” said Mr. Kerins.

Global Components
		Quarter Ended						Six Months Ended
		June 29,			July 1,			June 29,			July 1,
(in millions)		2024			2023			2024			2023
Global components sales		$	5,032		$	6,683		$	10,223		$	13,539
Global components operating income, as reported			210			381			436			799
Global components non-GAAP operating income			218			388			461			812

In the second quarter of 2024, global components sales decreased 25 percent year over year. Americas components second-quarter sales decreased 24 percent year over year. EMEA components second-quarter sales decreased 33 percent year over year and decreased 32 percent year over year on a constant currency basis. Asia-Pacific components second-quarter sales decreased 18 percent year over year and decreased 17 percent year over year on a constant currency basis.

Global Enterprise Computing Solutions

“Our enterprise computing solutions business delivered year-over-year billings growth as we continued to capitalize on the market’s transition to IT as a service. We benefited from another solid quarter in EMEA along with improving activity levels in North America,” said Mr. Kerins.

Global Enterprise Computing Solutions (ECS)
		Quarter Ended						Six Months Ended
		June 29,			July 1,			June 29,			July 1,
(in millions)		2024			2023			2024			2023
Global ECS sales		$	1,861		$	1,832		$	3,594		$	3,712
Global ECS operating income, as reported			103			86			174			167
Global ECS non-GAAP operating income			104			87			176			170

In the second quarter of 2024, global ECS sales increased 2 percent year over year. EMEA ECS second-quarter sales increased 8 percent year over year and increased 9 percent year over year on a constant currency basis. Americas ECS second-quarter sales decreased 4 percent year over year and decreased 3 percent year over year on a constant currency basis.

Other Financial Metrics

“In the second quarter, we managed our working capital in line with market conditions, reducing inventory levels by approximately $140 million, or $1.2 billion over the last nine months,” said Raj Agrawal, Arrow’s senior vice president and chief financial officer. “We also generated $320 million in cash flow from operations, providing us capital allocation flexibility, and enabling $50 million in share repurchases during the quarter.”

¹ A reconciliation of non-GAAP financial measures to GAAP financial measures is presented in the reconciliation tables included herein.

Third-Quarter 2024 Outlook

• Consolidated sales of $6.37 billion to $6.97 billion, with global components sales of $4.70 billion to $5.10 billion, and global enterprise computing solutions sales of $1.67 billion to $1.87 billion
• Net income per share on a diluted basis of $1.70 to $1.90, and non-GAAP net income per share on a diluted basis of $2.10 to $2.30
• Average tax rate in the range of 23 to 25 percent
• Interest expense of approximately $70 million
• Changes in foreign currencies to increase sales by approximately $7 million, and to have no impact on earnings per share on a diluted basis compared to the third quarter of 2023
• Changes in foreign currencies to increase quarter-over-quarter growth in sales by $30 million and earnings per share on a diluted basis by $0.02 compared to the second quarter of 2024

Third-Quarter 2024 GAAP to non-GAAP Outlook Reconciliation
NON-GAAP SALES RECONCILIATION
		Quarter Ended								Quarter Ended
		September 28,			September 30,					September 28,			June 29,
(in billions)		2024			2023			% Change		2024			2024			% Change
Global components sales, GAAP		$	4.70 - 5.10		$	6.25		(25%) - (18%)		$	4.70 - 5.10		$	5.03		(7%) - 1%
Impact of changes in foreign currencies			—			—					—			0.02
Global components sales, constant currency		$	4.70 - 5.10		$	6.25		(25%) - (18%)		$	4.70 - 5.10		$	5.05		(7%) - 1%
Global ECS sales, GAAP		$	1.67 - 1.87		$	1.76		(5%) - 6%		$	1.67 - 1.87		$	1.86		(10%) - 0%
Impact of changes in foreign currencies			—			0.01					—			0.01
Global ECS sales, constant currency		$	1.67 - 1.87		$	1.77		(6%) - 6%		$	1.67 - 1.87		$	1.87		(11%) - 0%

NON-GAAP EARNINGS RECONCILIATION

Intangible amortization

Restructuring &

Reported GAAP measure

expense

integration charges

Non-GAAP measure

Net income per diluted share

$1.70 to $1.90

$0.10

$0.30

$2.10 to $2.30

Earnings Presentation

Please refer to the earnings presentation, which can be found at investor.arrow.com, as a supplement to the company’s earnings release. The company uses its website as a tool to disclose important information about the company and to comply with its disclosure obligations under Regulation Fair Disclosure.

Webcast and Conference Call Information

Arrow Electronics will host a conference call to discuss second-quarter 2024 financial results on August 1, 2024, at 1:00 PM ET.

A live webcast of the conference call will be available via the events section of investor.arrow.com or by accessing the webcast link directly at https://events.q4inc.com/attendee/244342075. Shortly after the conclusion of the conference call, a webcast replay will be available on the Arrow website for one year.

About Arrow Electronics

Arrow Electronics guides innovation forward for thousands of leading technology manufacturers and service providers. With 2023 sales of $33 billion, Arrow develops technology solutions that help improve business and daily life. Learn more at arrow.com.

Information Relating to Forward-Looking Statements

This press release 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 sales due to changes in foreign currencies, intangible amortization expense per diluted share, restructuring & integration charges per diluted share, and expectations regarding market demand and conditions and shareholder returns. These and other forward-looking statements are subject to numerous assumptions, risks, and uncertainties, which could cause actual results or facts to differ materially from such statements for a variety of reasons, including, but not limited to: unfavorable economic conditions; disruptions or inefficiencies in the supply chain; political instability and changes; impacts of military conflict and sanctions; industry conditions; changes in product supply, pricing and customer demand; competition; other vagaries in the global components and the global ECS markets; deteriorating economic conditions, including economic recession, inflation, tax rates, foreign currency exchange rates, or the availability of capital; the effects of natural or man-made catastrophic events; changes in relationships with key suppliers; increased profit margin pressure; changes in legal and regulatory matters; non-compliance with certain regulations, such as export, antitrust, and anti-corruption laws; foreign tax and other loss contingencies; breaches of security or privacy of business information and information system failures, including related to current or future implementations, integrations and upgrades; outbreaks, epidemics, pandemics, or public health crises; and the company's ability to generate positive cash flow. For a further discussion of these and other factors that could cause the company's future results to differ materially from any forward-looking statements, see the section entitled “Risk Factors” in the company's most recent Quarterly Report on Form 10-Q and the company's most recent Annual Report on Form 10-K, as well as in other filings the company makes with the Securities and Exchange Commission. Shareholders and other readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date on which they are made. The company undertakes no obligation to update publicly or revise any of the forward-looking statements.

Certain Non-GAAP Financial Information

In addition to disclosing financial results that are determined in accordance with accounting principles generally accepted in the United States (“GAAP”), the company also provides certain non-GAAP financial information. The company provides the following non-GAAP metrics: sales, operating income (including by business segment), income before income taxes, net income attributable to shareholders, effective tax rate and net income per share on a diluted basis. The foregoing non-GAAP measures are adjusted by certain of the following, as applicable: impact of changes in foreign currencies (referred to as “changes in foreign currencies” or “on a constant currency basis”) by re-translating prior-period results at current period foreign exchange rates; identifiable intangible asset amortization, restructuring, integration, and other charges; net gains and losses on investments; impact of wind down to inventory; loss on extinguishment of debt; and impact of tax legislation changes. Management believes that providing this additional information is useful to the reader to better assess and understand the company’s operating performance and future prospects in the same manner as management, especially when comparing results with previous periods. Management typically monitors the business as adjusted for these items, in addition to GAAP results, to understand and compare operating results across accounting periods, for internal budgeting purposes, for short- and long-term operating plans, and to evaluate the company's financial performance. However, analysis of results on a non-GAAP basis should be used as a complement to, in conjunction with, and not as a substitute for, data presented in accordance with GAAP. For further discussion of our non-GAAP measures and related adjustments, refer to the section entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the company's most recent Quarterly Report on Form 10-Q and the company's most recent Annual Report on Form 10-K.

ARROW ELECTRONICS, INC. CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands except per share data) (Unaudited)
		Quarter Ended								Six Months Ended
		June 29, 2024				July 1, 2023				June 29, 2024				July 1, 2023
Sales		$	6,892,868			$	8,514,516			$	13,817,128			$	17,250,944
Cost of sales			6,046,424				7,448,467				12,112,858				15,071,073
Gross profit			846,444				1,066,049				1,704,270				2,179,871
Operating expenses:
Selling, general, and administrative			552,595				617,202				1,135,921				1,259,633
Depreciation and amortization			41,037				46,264				82,764				92,943
Restructuring, integration, and other			40,537				10,333				87,393				12,893
			634,169				673,799				1,306,078				1,365,469
Operating income			212,275				392,250				398,192				814,402
Equity in earnings of affiliated companies			1,254				3,061				910				2,981
(Loss) gain on investments, net			(4,615	)			497				(4,517	)			10,808
Loss on extinguishment of debt			(1,657	)			—				(1,657	)			—
Employee benefit plan expense, net			(980	)			(803	)			(1,913	)			(1,656	)
Interest and other financing expense, net			(66,891	)			(84,834	)			(146,495	)			(164,492	)
Income before income taxes			139,386				310,171				244,520				662,043
Provision for income taxes			29,762				72,380				51,798				148,927
Consolidated net income			109,624				237,791				192,722				513,116
Noncontrolling interests			926				1,232				423				2,807
Net income attributable to shareholders		$	108,698			$	236,559			$	192,299			$	510,309
Net income per share:
Basic		$	2.03			$	4.17			$	3.56			$	8.84
Diluted		$	2.01			$	4.12			$	3.53			$	8.74
Weighted-average shares outstanding:
Basic			53,640				56,720				53,944				57,726
Diluted			54,181				57,355				54,496				58,409

ARROW ELECTRONICS, INC. CONSOLIDATED BALANCE SHEETS (In thousands except par value) (Unaudited)
		June 29, 2024				December 31, 2023
ASSETS
Current assets:
Cash and cash equivalents		$	213,009			$	218,053
Accounts receivable, net			10,886,501				12,238,073
Inventories			4,654,793				5,187,225
Other current assets			1,010,942				684,126
Total current assets			16,765,245				18,327,477
Property, plant, and equipment, at cost:
Land			5,691				5,691
Buildings and improvements			190,109				195,579
Machinery and equipment			1,623,869				1,632,606
			1,819,669				1,833,876
Less: Accumulated depreciation and amortization			(1,319,945	)			(1,303,136	)
Property, plant, and equipment, net			499,724				530,740
Investments in affiliated companies			60,400				62,741
Intangible assets, net			112,470				127,440
Goodwill			2,052,701				2,050,426
Other assets			617,226				627,344
Total assets		$	20,107,766			$	21,726,168
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable		$	8,770,862			$	10,070,015
Accrued expenses			1,687,273				1,463,915
Short-term borrowings, including current portion of long-term debt			860,538				1,653,954
Total current liabilities			11,318,673				13,187,884
Long-term debt			2,479,313				2,153,553
Other liabilities			495,730				507,424
Equity:
Shareholders’ equity:
Common stock, par value $1:
Authorized - 160,000 shares in both 2024 and 2023
Issued - 58,046 and 57,691 shares in 2024 and 2023			58,046				57,691
Capital in excess of par value			574,530				553,340
Treasury stock (5,101 and 3,880 shares in 2024 and 2023, respectively), at cost			(456,123	)			(297,745	)
Retained earnings			5,982,516				5,790,217
Accumulated other comprehensive loss			(415,666	)			(298,039	)
Total shareholders’ equity			5,743,303				5,805,464
Noncontrolling interests			70,747				71,843
Total equity			5,814,050				5,877,307
Total liabilities and equity		$	20,107,766			$	21,726,168

ARROW ELECTRONICS, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) (Unaudited)
		Quarter Ended
		June 29, 2024				July 1, 2023
Cash flows from operating activities:
Consolidated net income		$	109,624			$	237,791
Adjustments to reconcile consolidated net income to net cash provided by (used for) operations:
Depreciation and amortization			41,037				46,264
Amortization of stock-based compensation			8,253				8,852
Equity in earnings of affiliated companies			(1,254	)			(3,061	)
Deferred income taxes			(4,597	)			(25,869	)
Loss on extinguishment of debt			1,657				—
Loss (gain) on investments, net			4,750				(497	)
Other			3,675				1,665
Change in assets and liabilities, net of effects of acquired businesses:
Accounts receivable, net			155,886				(377,117	)
Inventories			130,661				58,148
Accounts payable			(160,026	)			(8,558	)
Accrued expenses			251,990				(83,267	)
Other assets and liabilities			(221,475	)			18,845
Net cash provided by (used for) operating activities			320,181				(126,804	)
Cash flows from investing activities:
Acquisition of property, plant, and equipment			(22,101	)			(16,991	)
Other			1,313				95
Net cash used for investing activities			(20,788	)			(16,896	)
Cash flows from financing activities:
Change in short-term and other borrowings			(434,845	)			344,389
Proceeds from (repayments of) long-term bank borrowings, net			196,575				(43,786	)
Net proceeds from note offering			494,678				(2,332	)
Redemption of notes			(500,000	)			—
Proceeds from exercise of stock options			1,839				10,447
Repurchases of common stock			(75,353	)			(212,416	)
Settlement of forward-starting interest rate swap			—				56,711
Other			(141	)			(142	)
Net cash (used for) provided by financing activities			(317,247	)			152,871
Effect of exchange rate changes on cash			(11,947	)			25,657
Net (decrease) increase in cash and cash equivalents			(29,801	)			34,828
Cash and cash equivalents at beginning of period			242,810				205,554
Cash and cash equivalents at end of period		$	213,009			$	240,382

ARROW ELECTRONICS, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) (Unaudited)
		Six Months Ended
		June 29, 2024				July 1, 2023
Cash flows from operating activities:
Consolidated net income		$	192,722			$	513,116
Adjustments to reconcile consolidated net income to net cash provided by operations:
Depreciation and amortization			82,764				92,943
Amortization of stock-based compensation			21,700				28,349
Equity in earnings of affiliated companies			(910	)			(2,981	)
Deferred income taxes			(7,398	)			(33,399	)
Loss on extinguishment of debt			1,657				—
Loss (gain) on investments, net			4,763				(10,808	)
Other			4,864				2,986
Change in assets and liabilities, net of effects of acquired businesses:
Accounts receivable, net			1,213,562				1,324,772
Inventories			493,474				(141,373	)
Accounts payable			(1,237,812	)			(1,513,259	)
Accrued expenses			273,043				(215,583	)
Other assets and liabilities			(319,038	)			52,237
Net cash provided by operating activities			723,391				97,000
Cash flows from investing activities:
Acquisition of property, plant, and equipment			(51,636	)			(37,105	)
Other			6,452				10,962
Net cash used for investing activities			(45,184	)			(26,143	)
Cash flows from financing activities:
Change in short-term and other borrowings			(1,144,520	)			198,339
Proceeds from (repayments of) long-term bank borrowings, net			673,607				(9,426	)
Net proceeds from note offering			494,678				496,268
Redemption of notes			(500,000	)			(300,000	)
Proceeds from exercise of stock options			4,768				16,381
Repurchases of common stock			(163,301	)			(516,217	)
Settlement of forward-starting interest rate swap			—				56,711
Other			(141	)			(142	)
Net cash used for financing activities			(634,909	)			(58,086	)
Effect of exchange rate changes on cash			(48,342	)			50,696
Net (decrease) increase in cash and cash equivalents			(5,044	)			63,467
Cash and cash equivalents at beginning of period			218,053				176,915
Cash and cash equivalents at end of period		$	213,009			$	240,382

ARROW ELECTRONICS, INC. NON-GAAP SALES RECONCILIATION (In thousands) (Unaudited)
		Quarter Ended
		June 29, 2024			July 1, 2023				% Change
Consolidated sales, as reported		$	6,892,868		$	8,514,516			(19.0	)	%
Impact of changes in foreign currencies			—			(52,232	)
Consolidated sales, constant currency		$	6,892,868		$	8,462,284			(18.5	)	%
Global components sales, as reported		$	5,032,031		$	6,682,882			(24.7	)	%
Impact of changes in foreign currencies			—			(44,642	)
Global components sales, constant currency		$	5,032,031		$	6,638,240			(24.2	)	%
Americas components sales, as reported		$	1,572,840		$	2,066,562			(23.9	)	%
Impact of changes in foreign currencies			—			(1,513	)
Americas components sales, constant currency		$	1,572,840		$	2,065,049			(23.8	)	%
Asia components sales, as reported		$	2,019,697		$	2,462,841			(18.0	)	%
Impact of changes in foreign currencies			—			(17,330	)
Asia components sales, constant currency		$	2,019,697		$	2,445,511			(17.4	)	%
EMEA components sales, as reported		$	1,439,494		$	2,153,479			(33.2	)	%
Impact of changes in foreign currencies			—			(25,799	)
EMEA components sales, constant currency		$	1,439,494		$	2,127,680			(32.3	)	%
Global ECS sales, as reported		$	1,860,837		$	1,831,634			1.6		%
Impact of changes in foreign currencies			—			(7,590	)
Global ECS sales, constant currency		$	1,860,837		$	1,824,044			2.0		%
Americas ECS sales, as reported		$	964,070		$	1,000,506			(3.6	)	%
Impact of changes in foreign currencies			—			(1,709	)
Americas ECS sales, constant currency		$	964,070		$	998,797			(3.5	)	%
EMEA ECS sales, as reported		$	896,767		$	831,128			7.9		%
Impact of changes in foreign currencies			—			(5,881	)
EMEA ECS sales, constant currency		$	896,767		$	825,247			8.7		%

ARROW ELECTRONICS, INC. NON-GAAP SALES RECONCILIATION (In thousands) (Unaudited)
		Six Months Ended
		June 29, 2024			July 1, 2023				% Change
Consolidated sales, as reported		$	13,817,128		$	17,250,944			(19.9	)	%
Impact of changes in foreign currencies			—			(42,862	)
Consolidated sales, constant currency		$	13,817,128		$	17,208,082			(19.7	)	%
Global components sales, as reported		$	10,223,448		$	13,538,675			(24.5	)	%
Impact of changes in foreign currencies			—			(48,805	)
Global components sales, constant currency		$	10,223,448		$	13,489,870			(24.2	)	%
Americas components sales, as reported		$	3,169,532		$	4,300,015			(26.3	)	%
Impact of changes in foreign currencies			—			(2,185	)
Americas components sales, constant currency		$	3,169,532		$	4,297,830			(26.3	)	%
Asia components sales, as reported		$	3,957,915		$	4,839,036			(18.2	)	%
Impact of changes in foreign currencies			—			(41,966	)
Asia components sales, constant currency		$	3,957,915		$	4,797,070			(17.5	)	%
EMEA components sales, as reported		$	3,096,001		$	4,399,624			(29.6	)	%
Impact of changes in foreign currencies			—			(4,654	)
EMEA components sales, constant currency		$	3,096,001		$	4,394,970			(29.6	)	%
Global ECS sales, as reported		$	3,593,680		$	3,712,269			(3.2	)	%
Impact of changes in foreign currencies			—			5,943
Global ECS sales, constant currency		$	3,593,680		$	3,718,212			(3.3	)	%
Americas ECS sales, as reported		$	1,871,818		$	1,998,620			(6.3	)	%
Impact of changes in foreign currencies			—			(2,539	)
Americas ECS sales, constant currency		$	1,871,818		$	1,996,081			(6.2	)	%
EMEA ECS sales, as reported		$	1,721,862		$	1,713,649			0.5		%
Impact of changes in foreign currencies			—			8,482
EMEA ECS sales, constant currency		$	1,721,862		$	1,722,131			(0.0	)	%

ARROW ELECTRONICS, INC. NON-GAAP EARNINGS RECONCILIATION (In thousands except per share data) (Unaudited)
Three months ended June 29, 2024
		Reported			Intangible			Restructuring,			Impact of				Non
		GAAP			amortization			Integration			Wind				recurring					Non-GAAP
		measure			expense			and other			Down(1)				tax items			Other(2)		measure
Operating income		$	212,275		$	7,456		$	40,537		$	1,627		$	—		$	—			261,895
Income before income taxes			139,386			7,456			40,537			1,627			—			6,272			195,278
Net income attributable to shareholders		$	108,698		$	5,457		$	30,323		$	1,238		$	—		$	4,766		$	150,482
Net income per diluted share (4)		$	2.01		$	0.10		$	0.56		$	0.02		$	—		$	0.09		$	2.78
Effective tax rate (5)			21.4	%																	22.4	%

Three months ended July 1, 2023
		Reported			Intangible			Restructuring,			Impact of				Non
		GAAP			amortization			Integration			Wind				recurring						Non-GAAP
		measure			expense			and other			Down(1)				tax items			Other(3)			measure
Operating income		$	392,250		$	7,908		$	10,333		$	—		$	—		$	—			$	410,491
Income before income taxes			310,171			7,908			10,333			—			—			(497	)			327,915
Net income attributable to shareholders		$	236,559		$	5,780		$	7,736		$	—		$	942		$	(378	)		$	250,639
Net income per diluted share (4)		$	4.12		$	0.10		$	0.13		$	—		$	0.02		$	(0.01	)		$	4.37
Effective tax rate (5)			23.3	%																		23.1	%

ARROW ELECTRONICS, INC. NON-GAAP EARNINGS RECONCILIATION (In thousands except per share data) (Unaudited)
Six months ended June 29, 2024
		Reported			Intangible			Restructuring,			Impact of				Non
		GAAP			amortization			Integration			Wind				recurring					Non-GAAP
		measure			expense			and other			Down(1)				tax items			Other(2)		measure
Operating income		$	398,192		$	15,002		$	87,393		$	12,086		$	—		$	—		$	512,673
Income before income taxes			244,520			15,002			87,393			12,086			—			6,174			365,175
Net income attributable to shareholders		$	192,299		$	10,989		$	65,165		$	9,195		$	—		$	4,692		$	282,340
Net income per diluted share (4)		$	3.53		$	0.20		$	1.20		$	0.17		$	—		$	0.09		$	5.18
Effective tax rate (5)			21.2	%																	22.5	%

Six months ended July 1, 2023
		Reported			Intangible			Restructuring,			Impact of				Non
		GAAP			amortization			Integration			Wind				recurring						Non-GAAP
		measure			expense			and other			Down(1)				tax items			Other(3)			measure
Operating income		$	814,402		$	15,888		$	12,893		$	—		$	—		$	—			$	843,183
Income before income taxes			662,043			15,888			12,893			—			—			(10,808	)			680,016
Net income attributable to shareholders		$	510,309		$	11,616		$	9,576		$	—		$	942		$	(8,218	)		$	524,225
Net income per diluted share (4)		$	8.74		$	0.20		$	0.16		$	—		$	0.02		$	(0.14	)		$	8.98
Effective tax rate (5)			22.5	%																		22.5	%

(1)		Includes write downs of inventory related to the wind down of a business.
(2)		Other includes loss (gain) on investments, net and loss on extinguishment of debt.
(3)		Other includes loss (gain) on investments, net.
(4)		The sum of the components for non-GAAP diluted EPS, as adjusted may not agree to totals, as presented, due to rounding.
(5)		The items as shown in this table, represent the reconciling items for the tax rate as reported and as a non-GAAP measure.

ARROW ELECTRONICS, INC. SEGMENT INFORMATION (In thousands) (Unaudited)
		Quarter Ended								Six Months Ended
		June 29, 2024				July 1, 2023				June 29, 2024				July 1, 2023
Sales:
Global components		$	5,032,031			$	6,682,882			$	10,223,448			$	13,538,675
Global ECS			1,860,837				1,831,634				3,593,680				3,712,269
Consolidated		$	6,892,868			$	8,514,516			$	13,817,128			$	17,250,944
Operating income (loss):
Global components (a)		$	210,201			$	381,314			$	435,763			$	798,853
Global ECS (b)			102,581				86,228				174,040				167,327
Corporate (c)			(100,507	)			(75,292	)			(211,611	)			(151,778	)
Consolidated		$	212,275			$	392,250			$	398,192			$	814,402

(a)		Global components operating income includes 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.
(b)		Global ECS operating income includes a $20.0 million benefit related to the reversal of an allowance for credit losses due to the collection of certain aged receivables for the second quarter and first six months of 2024.
(c)		Corporate operating (loss) includes restructuring, integration, and other charges of $40.5 million and $87.4 million for the second quarter and first six months of 2024, respectively, and $10.3 million and $12.9 million for the second quarter and first six months of 2023, respectively.

NON-GAAP SEGMENT RECONCILIATION
		Quarter Ended						Six Months Ended
		June 29, 2024			July 1, 2023			June 29, 2024			July 1, 2023
Global components operating income, as reported		$	210,201		$	381,314		$	435,763		$	798,853
Intangible assets amortization expense			6,399			6,679			12,887			13,424
Impact of wind down to inventory			1,627			—			12,086			—
Global components non-GAAP operating income		$	218,227		$	387,993		$	460,736		$	812,277
Global ECS operating income, as reported		$	102,581		$	86,228		$	174,040		$	167,327
Intangible assets amortization expense			1,057			1,229			2,115			2,464
Global ECS non-GAAP operating income		$	103,638		$	87,457		$	176,155		$	169,791

 

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Investors:

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720-654-9893

Media:

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Vice President, Public Affairs and Corporate Marketing

303-824-4586

Source: Arrow Electronics

FAQ

What were Arrow Electronics' (ARW) Q2 2024 sales?

Arrow Electronics reported sales of $6.9 billion for Q2 2024, exceeding their guidance.

How did Arrow's (ARW) Global Components segment perform in Q2 2024?

Arrow's Global Components sales decreased 25% year-over-year to $5.032 billion in Q2 2024.

What is Arrow Electronics' (ARW) outlook for Q3 2024?

Arrow expects Q3 2024 consolidated sales between $6.37 billion and $6.97 billion, with non-GAAP earnings per diluted share projected at $2.10 to $2.30.

How much cash did Arrow Electronics (ARW) generate from operations in Q2 2024?

Arrow Electronics generated $320 million in cash flow from operations during Q2 2024.

What was Arrow Electronics' (ARW) non-GAAP earnings per diluted share for Q2 2024?

Arrow reported non-GAAP earnings per diluted share of $2.78 for Q2 2024.