Arrow Electronics Reports Third-Quarter 2022 Results

Rhea-AI Summary

Arrow Electronics reported record third-quarter 2022 sales of $9.27 billion, up 9% year over year. Net income increased to $342 million or $5.27 per share, compared to $290 million or $4.00 per share in the same quarter last year. Non-GAAP net income reached $354 million or $5.45 per share. The company's global components sales rose 10% to $7.30 billion, while enterprise computing solutions sales grew 4% to $1.97 billion. The outlook for the fourth quarter projects sales between $8.95 billion to $9.55 billion.

Positive

• Record Q3 2022 sales of $9.27 billion, a 9% increase year over year.
• Net income rose to $342 million, or $5.27 per share, up from $290 million and $4.00 per share in Q3 2021.
• Non-GAAP net income increased to $354 million, or $5.45 per share.
• Global components sales reached $7.30 billion, marking a 10% increase year over year.
• Share repurchase of $259 million in Q3, the largest in a single quarter.

Negative

• Asia-Pacific components sales decreased by 3% year over year.
• Currency fluctuations reduced growth by approximately $380 million in sales and $0.17 in earnings per share.

-- Record Sales, Gross Profit, Operating Income, and Earnings Per Share --

-- Third-Quarter Earnings Per Share of $5.27; Non-GAAP Earnings Per Share of $5.45 --

CENTENNIAL, Colo.--(BUSINESS WIRE)-- Arrow Electronics, Inc. (NYSE:ARW) today reported third-quarter 2022 sales of $9.27 billion, an increase of 9 percent year over year, and an increase of 14 percent year over year on a constant currency basis¹. Third-quarter net income was $342 million, or $5.27 per share on a diluted basis, compared with net income of $290 million, or $4.00 per share on a diluted basis, in the third quarter of 2021. Non-GAAP net income¹ was $354 million, or $5.45 per share on a diluted basis, in the third quarter of 2022, compared with non-GAAP net income of $293 million, or $4.04 per share on a diluted basis, in the third quarter of 2021. In the third quarter of 2022, changes in foreign currencies reduced growth by approximately $380 million on sales and $0.17 on earnings per share on a diluted basis compared to the third quarter of 2021.

“I am pleased to report that this was our best third quarter ever. This is a product of strong performance by both our global components and global enterprise computing solutions businesses,” said Sean Kerins, president and chief executive officer. “The dedication and focused execution by our team helped us deliver strong quarterly sales, gross profit, operating income, and earnings per share while facing market conditions that remain challenging.”

Global components third-quarter sales of $7.30 billion reflected an increase of 10 percent year over year, and an increase of 15 percent year over year on a constant currency basis. Asia-Pacific components third-quarter sales decreased 3 percent year over year. Americas components third-quarter sales increased 21 percent year over year. Europe components third-quarter sales increased 21 percent year over year, and increased 41 percent year over year on a constant currency basis. Global components third-quarter operating income was $495 million, and third-quarter non-GAAP operating income was $501 million.

“Demand for electronic components and associated design, engineering, and supply chain services remained strong. While supply is improving modestly, it is still insufficient to support the backlog that has built over prior quarters. Customer service and support remains our priority and our teams continue to work tirelessly to support the deliveries needed by our customers,” said Mr. Kerins.

Global enterprise computing solutions ("ECS") third-quarter sales of $1.97 billion reflected an increase of 4 percent year over year, and an increase of 10 percent year over year on a constant currency basis. Europe enterprise computing solutions third-quarter sales increased 7 percent year over year, and increased 25 percent year over year on a constant currency basis. Americas enterprise computing solutions third-quarter sales increased 3 percent year over year. Global enterprise computing solutions third-quarter operating income was $84 million, and third-quarter non-GAAP operating income was $86 million.

“Global demand for more complex, enterprise IT content was healthy, and while supply constraints persist, we saw some benefit from our historically high backlog. We continue to see strength in cloud and software adoption. We are well positioned for the transition to IT-as-a-Service,” said Mr. Kerins.

“With strong profitability and effective balance sheet management, we continue to generate attractive returns on invested capital,” said Raj Agrawal, senior vice president and chief financial officer. “We delivered on our commitment to return cash to shareholders while also maintaining strong leverage ratios. We repurchased $259 million of shares in the third quarter of 2022, which is the most capital we have ever returned in a single quarter. Our current repurchase authorization stands at $629 million.”

¹ A reconciliation of non-GAAP financial measures, including sales, gross profit, operating income, net income attributable to shareholders, and net income per share, to GAAP financial measures is presented in the reconciliation tables included herein.

FOURTH-QUARTER 2022 OUTLOOK

• Consolidated sales of $8.95 billion to $9.55 billion, with global components sales of $6.80 billion to $7.10 billion, and global enterprise computing solutions sales of $2.15 billion to $2.45 billion

• Net income per share on a diluted basis of $5.44 to $5.64, and non-GAAP net income per share on a diluted basis of $5.60 to $5.80

• Average tax rate of approximately 23.5 percent compared to the long-term range of 23 to 25 percent

• Average diluted shares outstanding of 62 million

• Interest expense of approximately $62 million

• Expecting the average USD-to-Euro exchange rate for the fourth quarter of 2022 to be $0.98 to €1 compared to $1.14 to €1 in the fourth quarter of 2021

• Changes in foreign currencies to reduce year over year growth in sales by $420 million and earnings per share on a diluted basis by $0.25 compared to the fourth quarter of 2021

• Changes in foreign currencies to reduce quarter over quarter growth in sales by $100 million and earnings per share on a diluted basis by $0.07 compared to the third quarter of 2022

• On a constant currency basis, our fourth quarter guidance implies a sequential growth rate range of down 2% to down 6% for global components and up 11% to 26% for global enterprise computing solutions, when compared to the third-quarter of 2022

Fourth-Quarter 2022 GAAP to non-GAAP Outlook Reconciliation
NON-GAAP SALES RECONCILIATION
	Quarter Ended								Quarter Ended
(in billions)	December 31, 2022		December 31, 2021				% Change		December 31, 2022		October 1, 2022				% Change
Global components sales, GAAP	$6.80 – $7.10		$	6.68			2% - 6%		$6.80 – $7.10		$	7.30			(7%) - (3%)
Impact of changes in foreign currencies	—			(0.28	)				—			(0.07	)
Global components sales, constant currency	$6.80 – $7.10		$	6.40			6% - 11%		$6.80 – $7.10		$	7.23			(6%) - (2%)
Global ECS sales, GAAP	$2.15 – $2.45		$	2.34			(8%) - 5%		$2.15 – $2.45		$	1.97			9% - 24%
Impact of changes in foreign currencies	—			(0.14	)				—			(0.03	)
Global ECS sales, constant currency	$2.15 – $2.45		$	2.20			(2%) - 11%		$2.15 – $2.45		$	1.94			11% - 26%

NON-GAAP EARNINGS RECONCILIATION
	Reported GAAP measure	Intangible amortization expense	Restructuring & integration charges	Non-GAAP measure
Net income per diluted share	$5.44 to $5.64	$0.10	$0.06	$5.60 to $5.80

Please refer to the CFO commentary, 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 comply with its disclosure obligations under Regulation Fair Disclosure.

Arrow Electronics guides innovation forward for over 220,000 leading technology manufacturers and service providers. With 2021 sales of $34 billion, Arrow develops technology solutions that improve business and daily life. Learn more at fiveyearsout.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 fourth quarter of fiscal 2022 such as sales, net income per diluted share, non-GAAP net income per diluted share, average tax rate, average diluted shares outstanding, interest expense, average USD-to-Euro exchange rate, impact to sales due to changes in foreign currencies, intangible amortization expense per diluted share, restructuring & integration charges per diluted share, and expectation regarding market demand. These 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: disruptions or inefficiencies in the supply chain, including any potential adverse effects of the ongoing global COVID-19 pandemic, impacts of the conflict in Ukraine, industry conditions, changes in product supply, pricing and customer demand, competition, other vagaries in the global components and the global enterprise computing solutions (“ECS”) markets, deteriorating economic conditions, including economic recession, inflation, tax rates, foreign currency exchange rates, or the availability of capital, 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, and the company's ability to generate 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 non-GAAP sales, gross profit, operating income, income before income taxes, provision for income taxes, consolidated net income, noncontrolling interests, net income attributable to shareholders, effective tax rate and net income per share on a diluted basis, which are non-GAAP measures adjusted for the 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, pension settlement loss and net gains and losses on investments. 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.

ARROW ELECTRONICS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands except per share data)
(Unaudited)
	Quarter Ended								Nine Months Ended
	October 1, 2022				October 2, 2021				October 1, 2022				October 2, 2021
Sales	$	9,266,432			$	8,512,391			$	27,801,399			$	25,460,941
Cost of sales		8,079,520				7,436,619				24,170,769				22,454,954
Gross profit		1,186,912				1,075,772				3,630,630				3,005,987
Operating expenses:
Selling, general, and administrative expenses		634,353				625,883				1,931,918				1,802,534
Depreciation and amortization		46,230				48,054				141,787				146,924
Restructuring, integration, and other charges (credits)		3,635				(3,030	)			11,027				11,639
		684,218				670,907				2,084,732				1,961,097
Operating income		502,694				404,865				1,545,898				1,044,890
Equity in earnings of affiliated companies		1,718				1,151				4,726				2,185
Gain (loss) on investments, net		(3,480	)			1,386				(11,213	)			10,905
Employee benefit plan expense, net		(890	)			(1,256	)			(2,614	)			(3,924	)
Interest and other financing expense, net		(50,936	)			(32,667	)			(123,427	)			(97,008	)
Income before income taxes		449,106				373,479				1,413,370				957,048
Provision for income taxes		105,500				82,929				332,273				218,068
Consolidated net income		343,606				290,550				1,081,097				738,980
Noncontrolling interests		1,207				523				3,615				1,991
Net income attributable to shareholders	$	342,399			$	290,027			$	1,077,482			$	736,989
Net income per share:
Basic	$	5.33			$	4.05			$	16.31			$	10.04
Diluted	$	5.27			$	4.00			$	16.12			$	9.92
Weighted-average shares outstanding:
Basic		64,228				71,671				66,055				73,426
Diluted		64,979				72,571				66,845				74,313

ARROW ELECTRONICS, INC.
CONSOLIDATED BALANCE SHEETS
(In thousands except par value)
(Unaudited)
	October 1, 2022				December 31, 2021
ASSETS
Current assets:
Cash and cash equivalents	$	333,985			$	222,194
Accounts receivable, net		11,218,611				11,123,946
Inventories		5,083,378				4,201,965
Other current assets		495,145				345,218
Total current assets		17,131,119				15,893,323
Property, plant, and equipment, at cost:
Land		5,691				5,736
Buildings and improvements		184,091				186,097
Machinery and equipment		1,544,457				1,523,919
		1,734,239				1,715,752
Less: Accumulated depreciation and amortization		(1,138,372	)			(1,032,941	)
Property, plant, and equipment, net		595,867				682,811
Investments in affiliated companies		66,358				63,695
Intangible assets, net		166,388				195,029
Goodwill		1,979,233				2,080,371
Other assets		566,764				620,311
Total assets	$	20,505,729			$	19,535,540
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable	$	9,540,449			$	9,617,084
Accrued expenses		1,273,097				1,326,386
Short-term borrowings, including current portion of long-term debt		604,521				382,619
Total current liabilities		11,418,067				11,326,089
Long-term debt		3,187,025				2,244,443
Other liabilities		597,951				624,162
Equity:
Shareholders’ equity:
Common stock, par value $1:
Authorized - 160,000 shares in both 2022 and 2021
Issued - 125,424 shares in both 2022 and 2021		125,424				125,424
Capital in excess of par value		1,201,185				1,189,845
Treasury stock (63,324 and 57,358 shares in 2022 and 2021, respectively), at cost		(4,338,414	)			(3,629,265	)
Retained earnings		8,865,430				7,787,948
Accumulated other comprehensive loss		(607,878	)			(191,657	)
Total shareholders’ equity		5,245,747				5,282,295
Noncontrolling interests		56,939				58,551
Total equity		5,302,686				5,340,846
Total liabilities and equity	$	20,505,729			$	19,535,540

ARROW ELECTRONICS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
	Quarter Ended
	October 1, 2022				October 2, 2021
Cash flows from operating activities:
Consolidated net income	$	343,606			$	290,550
Adjustments to reconcile consolidated net income to net cash provided by (used for) operations:
Depreciation and amortization		46,230				48,054
Amortization of stock-based compensation		3,773				7,639
Equity in earnings of affiliated companies		(1,718	)			(1,151	)
Deferred income taxes		8,152				(2,715	)
Loss (gain) on investments, net		3,480				(1,301	)
Other		307				1,539
Change in assets and liabilities:
Accounts receivable, net		(594,767	)			(545,314	)
Inventories		(255,871	)			(211,554	)
Accounts payable		482,061				413,992
Accrued expenses		132,636				91,481
Other assets and liabilities		(26,823	)			23,026
Net cash provided by (used for) operating activities		141,066				114,246
Cash flows from investing activities:
Acquisition of property, plant, and equipment		(18,536	)			(21,176	)
Proceeds from collections of notes receivable		263				373
Net cash used for investing activities		(18,273	)			(20,803	)
Cash flows from financing activities:
Change in short-term and other borrowings		(19,506	)			(1,155	)
Proceeds (payments) from long-term bank borrowings, net		328,268				154,994
Proceeds from exercise of stock options		762				3,621
Repurchases of common stock		(241,291	)			(250,221	)
Net cash provided by (used for) financing activities		68,233				(92,761	)
Effect of exchange rate changes on cash		(82,637	)			(28,820	)
Net increase (decrease) in cash and cash equivalents		108,389				(28,138	)
Cash and cash equivalents at beginning of period		225,596				244,070
Cash and cash equivalents at end of period	$	333,985			$	215,932

ARROW ELECTRONICS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
	Nine Months Ended
	October 1, 2022				October 2, 2021
Cash flows from operating activities:
Consolidated net income	$	1,081,097			$	738,980
Adjustments to reconcile consolidated net income to net cash provided by (used for) operations:
Depreciation and amortization		141,787				146,924
Amortization of stock-based compensation		35,009				29,606
Equity in earnings of affiliated companies		(4,726	)			(2,185	)
Deferred income taxes		1,468				9,354
Loss (gain) on investments, net		11,213				(10,820	)
Other		2,673				7,672
Change in assets and liabilities:
Accounts receivable, net		(628,974	)			(262,272	)
Inventories		(1,011,763	)			(581,766	)
Accounts payable		166,602				136,329
Accrued expenses		192,759				174,583
Other assets and liabilities		(128,909	)			4,685
Net cash provided by (used for) operating activities		(141,764	)			391,090
Cash flows from investing activities:
Acquisition of property, plant, and equipment		(54,780	)			(62,285	)
Proceeds from sale of property, plant, and equipment		—				22,171
Proceeds from collections of notes receivable		20,805				373
Net cash used for investing activities		(33,975	)			(39,741	)
Cash flows from financing activities:
Change in short-term and other borrowings		276,516				(15,986	)
Proceeds from long-term bank borrowings, net		1,238,268				289,235
Redemption of notes		(350,000	)			(130,860	)
Proceeds from exercise of stock options		16,434				44,938
Repurchases of common stock		(725,254	)			(661,548	)
Other		(137	)			(159	)
Net cash provided by (used for) financing activities		455,827				(474,380	)
Effect of exchange rate changes on cash		(168,297	)			(34,652	)
Net increase (decrease) in cash and cash equivalents		111,791				(157,683	)
Cash and cash equivalents at beginning of period		222,194				373,615
Cash and cash equivalents at end of period	$	333,985			$	215,932

ARROW ELECTRONICS, INC.
NON-GAAP SALES RECONCILIATION
(In thousands)
(Unaudited)
	Quarter Ended
	October 1, 2022			October 2, 2021				% Change
Consolidated sales, as reported	$	9,266,432		$	8,512,391			8.9	%
Impact of changes in foreign currencies		—			(379,717	)
Consolidated sales, constant currency	$	9,266,432		$	8,132,674			13.9	%
Global components sales, as reported	$	7,300,347		$	6,623,926			10.2	%
Impact of changes in foreign currencies		—			(273,237	)
Global components sales, constant currency	$	7,300,347		$	6,350,689			15.0	%
Americas components sales, as reported	$	2,445,647		$	2,018,551			21.2	%
Impact of changes in foreign currencies		—			(3,252	)
Americas components sales, constant currency	$	2,445,647		$	2,015,299			21.4	%
Asia components sales, as reported	$	2,918,873		$	3,009,390			(3.0	)%
Impact of changes in foreign currencies		—			(45,046	)
Asia components sales, constant currency	$	2,918,873		$	2,964,344			(1.5	)%
Europe components sales, as reported	$	1,935,827		$	1,595,985			21.3	%
Impact of changes in foreign currencies		—			(224,939	)
Europe components sales, constant currency	$	1,935,827		$	1,371,046			41.2	%
Global ECS sales, as reported	$	1,966,085		$	1,888,465			4.1	%
Impact of changes in foreign currencies		—			(106,480	)
Global ECS sales, constant currency	$	1,966,085		$	1,781,985			10.3	%
Americas ECS sales, as reported	$	1,234,158		$	1,203,663			2.5	%
Impact of changes in foreign currencies		—			(5,696	)
Americas ECS sales, constant currency	$	1,234,158		$	1,197,967			3.0	%
Europe ECS sales, as reported	$	731,927		$	684,802			6.9	%
Impact of changes in foreign currencies		—			(100,784	)
Europe ECS sales, constant currency	$	731,927		$	584,018			25.3	%

ARROW ELECTRONICS, INC.
NON-GAAP SALES RECONCILIATION
(In thousands)
(Unaudited)
	Nine Months Ended
	October 1, 2022			October 2, 2021				% Change
Consolidated sales, as reported	$	27,801,399		$	25,460,941			9.2	%
Impact of changes in foreign currencies		—			(821,785	)
Consolidated sales, constant currency	$	27,801,399		$	24,639,156			12.8	%
Global components sales, as reported	$	21,960,974		$	19,677,940			11.6	%
Impact of changes in foreign currencies		—			(565,254	)
Global components sales, constant currency	$	21,960,974		$	19,112,686			14.9	%
Americas components sales, as reported	$	7,265,552		$	5,690,480			27.7	%
Impact of changes in foreign currencies		—			(5,974	)
Americas components sales, constant currency	$	7,265,552		$	5,684,506			27.8	%
Asia components sales, as reported	$	9,024,188		$	9,332,211			(3.3	)%
Impact of changes in foreign currencies		—			(69,024	)
Asia components sales, constant currency	$	9,024,188		$	9,263,187			(2.6	)%
Europe components sales, as reported	$	5,671,234		$	4,655,249			21.8	%
Impact of changes in foreign currencies		—			(490,256	)
Europe components sales, constant currency	$	5,671,234		$	4,164,993			36.2	%
Global ECS sales, as reported	$	5,840,425		$	5,783,001			1.0	%
Impact of changes in foreign currencies		—			(256,531	)
Global ECS sales, constant currency	$	5,840,425		$	5,526,470			5.7	%
Americas ECS sales, as reported	$	3,442,803		$	3,522,356			(2.3	) %
Impact of changes in foreign currencies		—			(15,459	)
Americas ECS sales, constant currency	$	3,442,803		$	3,506,897			(1.8	) %
Europe ECS sales, as reported	$	2,397,622		$	2,260,645			6.1	%
Impact of changes in foreign currencies		—			(241,072	)
Europe ECS sales, constant currency	$	2,397,622		$	2,019,573			18.7	%

ARROW ELECTRONICS, INC.
NON-GAAP EARNINGS RECONCILIATION
(In thousands except per share data)
(Unaudited)
Three months ended October 1, 2022
	Reported GAAP measure				Intangible amortization expense			Restructuring & Integration charges				Other(1)				Non-GAAP measure
Sales	$	9,266,432			$	—		$	—			$	—			$	9,266,432
Gross Profit		1,186,912				—			—				—				1,186,912
Operating income		502,694				8,674			3,635				—				515,003
Income before income taxes		449,106				8,674			3,635				3,480				464,895
Provision for income taxes		105,500				2,219			892				841				109,452
Consolidated net income		343,606				6,455			2,743				2,639				355,443
Noncontrolling interests		1,207				125			—				—				1,332
Net income attributable to shareholders	$	342,399			$	6,330		$	2,743			$	2,639			$	354,111
Net income per diluted share (3)	$	5.27			$	0.10		$	0.04			$	0.04			$	5.45
Effective tax rate (4)		23.5	%														23.5	%
Three months ended October 2, 2021
	Reported GAAP measure				Intangible amortization expense			Restructuring & Integration charges (credits)				Other(1)				Non-GAAP measure
Sales	$	8,512,391			$	—		$	—			$	—			$	8,512,391
Gross Profit		1,075,772				—			—				—				1,075,772
Operating income		404,865				9,202			(3,030	)			—				411,037
Income before income taxes		373,479				9,202			(3,030	)			(1,386	)			378,265
Provision for income taxes		82,929				2,353			(689	)			(334	)			84,259
Consolidated net income		290,550				6,849			(2,341	)			(1,052	)			294,006
Noncontrolling interests		523				147			—				—				670
Net income attributable to shareholders	$	290,027			$	6,702		$	(2,341	)		$	(1,052	)		$	293,336
Net income per diluted share (3)	$	4.00			$	0.09		$	(0.03	)		$	(0.01	)		$	4.04
Effective tax rate (4)		22.2	%														22.3	%

ARROW ELECTRONICS, INC.
NON-GAAP EARNINGS RECONCILIATION
(In thousands except per share data)
(Unaudited)
Nine months ended October 1, 2022
	Reported GAAP measure				Intangible amortization expense			Restructuring & Integration charges			Other(1)				Non-GAAP measure
Sales	$	27,801,399			$	—		$	—		$	—			$	27,801,399
Gross Profit		3,630,630				—			—			—				3,630,630
Operating income		1,545,898				26,522			11,027			—				1,583,447
Income before income taxes		1,413,370				26,522			11,027			11,213				1,462,132
Provision for income taxes		332,273				6,792			2,459			2,711				344,235
Consolidated net income		1,081,097				19,730			8,568			8,502				1,117,897
Noncontrolling interests		3,615				398			—			—				4,013
Net income attributable to shareholders	$	1,077,482			$	19,332		$	8,568		$	8,502			$	1,113,884
Net income per diluted share (3)	$	16.12			$	0.29		$	0.13		$	0.13			$	16.66
Effective tax rate (4)		23.5	%													23.5	%
Nine months ended October 2, 2021
	Reported GAAP measure				Intangible amortization expense			Restructuring & Integration charges(5)			Other(2)				Non-GAAP measure
Sales	$	25,460,941			$	—		$	—		$	—			$	25,460,941
Gross Profit		3,005,987				—			—			—				3,005,987
Operating income		1,044,890				27,844			11,639			—				1,084,373
Income before income taxes		957,048				27,844			11,639			(10,724	)			985,807
Provision for income taxes		218,068				7,120			2,565			(2,581	)			225,172
Consolidated net income		738,980				20,724			9,074			(8,143	)			760,635
Noncontrolling interests		1,991				447			—			—				2,438
Net income attributable to shareholders	$	736,989			$	20,277		$	9,074		$	(8,143	)		$	758,197
Net income per diluted share (3)	$	9.92			$	0.27		$	0.12		$	(0.11	)		$	10.20
Effective tax rate (4)		22.8	%													22.8	%
(1) Other includes (gain) loss on investments, net.
(2) Other includes gain on investments, net and pension settlement loss.
(3) The sum of the components for diluted EPS, as adjusted may not agree to totals, as presented, due to rounding.
(4) The items as shown in this table, represent the reconciling items for the tax rate as reported by GAAP measure and as a non-GAAP measure.
(5) Restructuring & Integration charges include impairment related to various long-lived assets.

ARROW ELECTRONICS, INC.
SEGMENT INFORMATION
(In thousands)
(Unaudited)
	Quarter Ended								Nine Months Ended
	October 1, 2022				October 2, 2021				October 1, 2022				October 2, 2021
Sales:
Global components	$	7,300,347			$	6,623,926			$	21,960,974			$	19,677,940
Global ECS		1,966,085				1,888,465				5,840,425				5,783,001
Consolidated	$	9,266,432			$	8,512,391			$	27,801,399			$	25,460,941
Operating income (loss):
Global components (a)	$	494,587			$	385,353			$	1,518,423			$	1,001,772
Global ECS		83,976				76,793				253,744				235,251
Corporate (b)		(75,869	)			(57,281	)			(226,269	)			(192,133	)
Consolidated	$	502,694			$	404,865			$	1,545,898			$	1,044,890

(a)		Global components operating income includes $12.5 million related to proceeds from legal settlements for the first nine months of 2021. Global components operating income for the first nine months of 2021 includes $4.5 million in restructuring, integration, and other charges.
(b)		Corporate operating income includes restructuring, integration, and other charges (credits) of $3.6 million and $11.0 million for the third quarter and first nine months of 2022, respectively, and $(3.0) million and $7.2 million for the third quarter and first nine months of 2021, respectively.

NON-GAAP SEGMENT RECONCILIATION
	Quarter Ended						Nine Months Ended
	October 1, 2022			October 2, 2021			October 1, 2022			October 2, 2021
Global components operating income, as reported	$	494,587		$	385,353		$	1,518,423		$	1,001,772
Intangible assets amortization expense		6,691			6,974			20,303			20,973
Restructuring, integration, and other charges		—			—			—			4,482
Global components non-GAAP operating income	$	501,278		$	392,327		$	1,538,726		$	1,027,227
Global ECS operating income, as reported	$	83,976		$	76,793		$	253,744		$	235,251
Intangible assets amortization expense		1,983			2,228			6,219			6,871
Global ECS non-GAAP operating income	$	85,959		$	79,021		$	259,963		$	242,122

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20221103005462/en/

Richard Seidlitz,

Vice President, Principal Accounting Officer

303-305-4936

Media Contact:

John Hourigan,

Vice President, Global Communications

303-824-4586

Source: Arrow Electronics

FAQ

What were Arrow Electronics' Q3 2022 earnings per share?

Arrow Electronics reported Q3 2022 earnings per share of $5.27.

How much did Arrow Electronics' sales increase in Q3 2022?

Arrow Electronics' sales increased by 9% year over year to $9.27 billion in Q3 2022.

What is Arrow Electronics' sales outlook for Q4 2022?

For Q4 2022, Arrow Electronics projects sales between $8.95 billion and $9.55 billion.

What factors affected Arrow Electronics' earnings in Q3 2022?

Changes in foreign currencies reduced Arrow Electronics' growth by approximately $380 million in sales and $0.17 in earnings per share.

Did Arrow Electronics repurchase any shares in Q3 2022?

Yes, Arrow Electronics repurchased $259 million of shares in Q3 2022.