Arrow Electronics Reports Third-Quarter 2023 Results

Rhea-AI Summary

Arrow Electronics reports Q3 2023 sales of $8.01 billion, a decrease of 14% YoY. Net income was $199 million, or $3.53 per share, compared to $342 million, or $5.27 per share, in Q3 2022. Non-GAAP net income was $233 million, or $4.14 per share. Global components sales decreased 14% YoY, while global ECS sales decreased 10% YoY. Fourth-quarter outlook: consolidated sales of $7.50 billion to $8.10 billion, net income per share of $3.30 to $3.50.

Positive

• Arrow Electronics reported a decrease in sales of 14% YoY in Q3 2023.
• Net income for Q3 2023 was $199 million, a decrease from $342 million in Q3 2022.
• Global components sales decreased 14% YoY, while global ECS sales decreased 10% YoY.
• Fourth-quarter outlook: consolidated sales of $7.50 billion to $8.10 billion, net income per share of $3.30 to $3.50.

Negative

• None.

-- Third-Quarter Earnings Per Share of $3.53; Non-GAAP Earnings Per Share of $4.14 –

-- Revenue of $8.01 billion in line with guidance --

CENTENNIAL, Colo.--(BUSINESS WIRE)-- Arrow Electronics, Inc. (NYSE:ARW) today reported third-quarter 2023 sales of $8.01 billion, a decrease of 14 percent year over year. Third-quarter net income was $199 million, or $3.53 per share on a diluted basis, compared with net income of $342 million, or $5.27 per share on a diluted basis, in the third quarter of 2022. Non-GAAP net income¹ was $233 million, or $4.14 per share on a diluted basis, in the third quarter of 2023, compared with non-GAAP net income of $354 million, or $5.45 per share on a diluted basis, in the third quarter of 2022. Both GAAP and non-GAAP earnings per share in the third quarter of 2023 included a $0.87 benefit related to cash received from a legal settlement in the global components business, and a $0.31 impact for a charge taken to increase accounts receivable reserves associated with a customer in the global enterprise computing solutions (ECS) business.

“The company executed well amidst an inventory correction in the semiconductor market and a softer information technology market, delivering non-GAAP earnings per share at the high end of our guidance range,” said Sean Kerins, Arrow’s president, and chief executive officer.

Global components third-quarter sales of $6.25 billion reflected a decrease of 14 percent year over year. Europe components third-quarter sales increased 3 percent year over year, which was a 4 percent decline in constant currency. Asia-Pacific components third-quarter sales decreased 18 percent year over year. Americas components third-quarter sales decreased 24 percent year over year. Global components third-quarter operating income was $379 million, and third-quarter non-GAAP operating income was $386 million. These results include a $62 million benefit resulting from a legal settlement recorded as a decrease to operating expenses.

“With lead times normalizing, customer inventory remained elevated, impacting order velocity and top-line results across most vertical markets. Despite the market conditions, operating margins are meaningfully higher than in prior market corrections,” said Mr. Kerins. “We were encouraged by the level of demand creation activity in the quarter and the continued traction of our supply chain services offering.”

Global ECS third-quarter sales of $1.76 billion reflected a decrease of 10 percent year over year. Europe ECS third-quarter sales increased 2 percent year over year, which was a 5 percent decline in constant currency. Americas ECS third-quarter sales decreased 18 percent year over year. Global ECS third-quarter operating income was $55 million, and third-quarter non-GAAP operating income was $56 million. These results include a $22 million charge taken to increase accounts receivable reserves associated with a customer.

“The mix in our ECS business continued to shift toward software related to infrastructure and cybersecurity, as well as cloud solutions. As a result, the business produced year-on-year billings growth albeit with a decline in sales,” said Mr. Kerins.

“Non-GAAP earnings per share after adjusting for the legal settlement and accounts receivable item, was at the high end of our guidance range,” said Raj Agrawal, senior vice president and chief financial officer. “We were pleased to generate $322 million in cash flow from operations in the third quarter. Additionally, we repurchased approximately $200 million of shares during the third quarter and now have remaining purchase authorization of approximately $622 million.”

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

FOURTH-QUARTER 2023 OUTLOOK

• Consolidated sales of $7.50 billion to $8.10 billion, with global components sales of $5.40 billion to $5.80 billion, and global enterprise computing solutions sales of $2.10 billion to $2.30 billion
• Net income per share on a diluted basis of $3.30 to $3.50, and non-GAAP net income per share on a diluted basis of $3.61 to $3.81
• Average tax rate in the range of 23 to 25 percent
• Average diluted shares outstanding of ~55 million
• Interest expense in the range of approximately $90 million
• Changes in foreign currencies expected to increase year-over-year growth in sales by $54 million, and earnings per share on a diluted basis by $0.02 compared to the fourth quarter of 2022
• Changes in foreign currencies expected to decrease quarter-over-quarter growth in sales by $82 million and earnings per share on a diluted basis by $0.07 compared to the third quarter of 2023

Fourth-Quarter 2023 GAAP to non-GAAP Outlook Reconciliation
NON-GAAP SALES RECONCILIATION
		Quarter Ended										Quarter Ended
		December 31,				December 31,						December 31,				September 30,
(in billions)		2023				2022				% Change		2023				2023				% Change
Global components sales, GAAP		$	5.40 - 5.80			$	6.83			(21%) - (15%)		$	5.40 - 5.80			$	6.25			(14%) - (7%)
Impact of changes in foreign currencies			—				0.03						—				(0.06	)
Global components sales, constant currency		$	5.40 - 5.80			$	6.86			(21%) - (15%)		$	5.40 - 5.80			$	6.19			(13%) - (6%)
Global ECS sales, GAAP		$	2.10 - 2.30			$	2.50			(16%) - (8%)		$	2.10 - 2.30			$	1.76			19% - 31%
Impact of changes in foreign currencies			—				0.02						—				(0.02	)
Global ECS sales, constant currency		$	2.10 - 2.30			$	2.52			(17%) - (9%)		$	2.10 - 2.30			$	1.74			21% - 32%

NON-GAAP EARNINGS RECONCILIATION
				Intangible amortization		Restructuring &
		Reported GAAP measure		expense		integration charges		Non-GAAP measure
Net income per diluted share		$3.30 to $3.50		$0.10		$0.21		$3.61 to $3.81

CFO Commentary and Earnings Presentation

Please refer to the CFO commentary and 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.

Conference Call and Webcast Information

Arrow Electronics will host a conference call to discuss third-quarter 2023 financial results on Nov. 2, 2023, at 1:00 PM ET. Register online at https://conferencingportals.com/event/fEoxDDHd to obtain dial-in information for the live conference call. The conference call will also be available via live webcast at investor.arrow.com. Shortly after the conclusion of the conference call, a webcast replay will be available at investor.arrow.com.

About Arrow Electronics

Arrow Electronics guides innovation forward for over 210,000 leading technology manufacturers and service providers. With 2022 sales of $37 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 fourth quarter of fiscal 2023 such as sales, net income per diluted share, non-GAAP net income per diluted share, average tax rate, average diluted shares outstanding, 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 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; 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; 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 non-GAAP sales, 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, net gains and losses on investments, 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.

ARROW ELECTRONICS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands except per share data)
(Unaudited)
		Quarter Ended								Nine Months Ended
		September 30, 2023				October 1, 2022				September 30, 2023					October 1, 2022
Sales		$	8,007,019			$	9,266,432			$	25,257,963			$	27,801,399
Cost of sales			7,027,422				8,079,520				22,098,495				24,170,769
Gross profit			979,597				1,186,912				3,159,468				3,630,630
Operating expenses:
Selling, general, and administrative expenses			563,150				634,353				1,822,783				1,931,918
Depreciation and amortization			45,005				46,230				137,948				141,787
Restructuring, integration, and other charges			31,359				3,635				44,252				11,027
			639,514				684,218				2,004,983				2,084,732
Operating income			340,083				502,694				1,154,485				1,545,898
Equity in earnings of affiliated companies			1,392				1,718				4,373				4,726
(Loss) gain on investments, net			(6,159	)			(3,480	)			4,649				(11,213	)
Employee benefit plan expense, net			(854	)			(890	)			(2,510	)			(2,614	)
Interest and other financing expense, net			(82,180	)			(50,936	)			(246,672	)			(123,427	)
Income before income taxes			252,282				449,106				914,325				1,413,370
Provision for income taxes			52,241				105,500				201,168				332,273
Consolidated net income			200,041				343,606				713,157				1,081,097
Noncontrolling interests			1,382				1,207				4,189				3,615
Net income attributable to shareholders		$	198,659			$	342,399			$	708,968			$	1,077,482
Net income per share:
Basic		$	3.57			$	5.33			$	12.43			$	16.31
Diluted		$	3.53			$	5.27			$	12.28			$	16.12
Weighted-average shares outstanding:
Basic			55,597				64,228				57,021				66,055
Diluted			56,298				64,979				57,715				66,845

ARROW ELECTRONICS, INC.
CONSOLIDATED BALANCE SHEETS
(In thousands except par value)
(Unaudited)
		September 30, 2023				December 31, 2022
ASSETS
Current assets:
Cash and cash equivalents		$	333,294			$	176,915
Accounts receivable, net			10,663,164				12,322,717
Inventories			5,805,520				5,319,369
Other current assets			503,982				521,339
Total current assets			17,305,960				18,340,340
Property, plant, and equipment, at cost:
Land			5,691				5,691
Buildings and improvements			185,790				184,211
Machinery and equipment			1,616,937				1,583,661
			1,808,418				1,773,563
Less: Accumulated depreciation and amortization			(1,272,214	)			(1,177,107	)
Property, plant, and equipment, net			536,204				596,456
Investments in affiliated companies			63,049				65,112
Intangible assets, net			134,811				159,137
Goodwill			2,021,987				2,027,626
Other assets			576,349				574,511
Total assets		$	20,638,360			$	21,763,182
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable		$	9,090,554			$	10,460,419
Accrued expenses			1,256,815				1,339,302
Short-term borrowings, including current portion of long-term debt			1,588,662				589,883
Total current liabilities			11,936,031				12,389,604
Long-term debt			2,615,001				3,182,964
Other liabilities			533,853				579,261
Equity:
Shareholders’ equity:
Common stock, par value $1:
Authorized - 160,000 shares in both 2023 and 2022
Issued - 125,424 shares in both 2023 and 2022			125,424				125,424
Capital in excess of par value			1,205,788				1,208,708
Treasury stock (71,269 and 66,175 shares in 2023 and 2022, respectively), at cost			(5,307,441	)			(4,637,345	)
Retained earnings			9,923,800				9,214,832
Accumulated other comprehensive loss			(462,310	)			(365,262	)
Total shareholders’ equity			5,485,261				5,546,357
Noncontrolling interests			68,214				64,996
Total equity			5,553,475				5,611,353
Total liabilities and equity		$	20,638,360			$	21,763,182

ARROW ELECTRONICS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
		Quarter Ended
		September 30, 2023				October 1, 2022
Cash flows from operating activities:
Consolidated net income		$	200,041			$	343,606
Adjustments to reconcile consolidated net income to net cash provided by operations:
Depreciation and amortization			45,005				46,230
Amortization of stock-based compensation			6,519				3,773
Equity in earnings of affiliated companies			(1,392	)			(1,718	)
Deferred income taxes			(19,639	)			8,152
Loss on investments, net			6,159				3,480
Other			1,092				307
Change in assets and liabilities:
Accounts receivable, net			260,749				(594,767	)
Inventories			(383,647	)			(255,871	)
Accounts payable			157,482				482,061
Accrued expenses			127,235				132,636
Other assets and liabilities			(77,897	)			(26,823	)
Net cash provided by operating activities			321,707				141,066
Cash flows from investing activities:
Acquisition of property, plant, and equipment			(20,670	)			(18,536	)
Proceeds from collections of notes receivable			—				263
Net cash used for investing activities			(20,670	)			(18,273	)
Cash flows from financing activities:
Change in short-term and other borrowings			603,693				(19,506	)
(Repayments of) proceeds from long-term bank borrowings, net			(557,308	)			328,268
Proceeds from exercise of stock options			443				762
Repurchases of common stock			(203,491	)			(241,291	)
Net cash (used for) provided by financing activities			(156,663	)			68,233
Effect of exchange rate changes on cash			(51,462	)			(82,637	)
Net increase in cash and cash equivalents			92,912				108,389
Cash and cash equivalents at beginning of period			240,382				225,596
Cash and cash equivalents at end of period		$	333,294			$	333,985

ARROW ELECTRONICS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
		Nine Months Ended
		September 30, 2023				October 1, 2022
Cash flows from operating activities:
Consolidated net income		$	713,157			$	1,081,097
Adjustments to reconcile consolidated net income to net cash provided by (used for) operations:
Depreciation and amortization			137,948				141,787
Amortization of stock-based compensation			34,868				35,009
Equity in earnings of affiliated companies			(4,373	)			(4,726	)
Deferred income taxes			(53,038	)			1,468
(Gain) loss on investments, net			(4,649	)			11,213
Other			4,078				2,673
Change in assets and liabilities:
Accounts receivable, net			1,585,521				(628,974	)
Inventories			(525,020	)			(1,011,763	)
Accounts payable			(1,355,777	)			166,602
Accrued expenses			(88,348	)			192,759
Other assets and liabilities			(25,660	)			(128,909	)
Net cash provided by (used for) operating activities			418,707				(141,764	)
Cash flows from investing activities:
Acquisition of property, plant, and equipment			(57,775	)			(54,780	)
Proceeds from collections of notes receivable			237				20,805
Proceeds from settlement of net investment hedge			10,725				—
Net cash used for investing activities			(46,813	)			(33,975	)
Cash flows from financing activities:
Change in short-term and other borrowings			802,032				276,516
(Repayments of) proceeds from long-term bank borrowings, net			(566,734	)			1,238,268
Net proceeds from note offering			496,268				—
Redemption of notes			(300,000	)			(350,000	)
Proceeds from exercise of stock options			16,824				16,434
Repurchases of common stock			(719,708	)			(725,254	)
Settlement of forward-starting interest rate swap			56,711				—
Other			(142	)			(137	)
Net cash (used for) provided by financing activities			(214,749	)			455,827
Effect of exchange rate changes on cash			(766	)			(168,297	)
Net increase in cash and cash equivalents			156,379				111,791
Cash and cash equivalents at beginning of period			176,915				222,194
Cash and cash equivalents at end of period		$	333,294			$	333,985

ARROW ELECTRONICS, INC.
NON-GAAP SALES RECONCILIATION
(In thousands)
(Unaudited)
		Quarter Ended
		September 30, 2023				October 1, 2022				% Change
Consolidated sales, as reported		$	8,007,019			$	9,266,432			(13.6	)%
Impact of changes in foreign currencies			—				145,732
Consolidated sales, constant currency		$	8,007,019			$	9,412,164			(14.9	)%
Global components sales, as reported		$	6,245,192			$	7,300,347			(14.5	)%
Impact of changes in foreign currencies			—				96,433
Global components sales, constant currency		$	6,245,192			$	7,396,780			(15.6	)%
Americas components sales, as reported		$	1,869,934			$	2,445,647			(23.5	)%
Impact of changes in foreign currencies			—				32
Americas components sales, constant currency		$	1,869,934			$	2,445,679			(23.5	)%
Asia components sales, as reported		$	2,387,835			$	2,918,873			(18.2	)%
Impact of changes in foreign currencies			—				(27,584	)
Asia components sales, constant currency		$	2,387,835			$	2,891,289			(17.4	)%
Europe components sales, as reported		$	1,987,423			$	1,935,827			2.7	%
Impact of changes in foreign currencies			—				123,985
Europe components sales, constant currency		$	1,987,423			$	2,059,812			(3.5	)%
Global ECS sales, as reported		$	1,761,827			$	1,966,085			(10.4	)%
Impact of changes in foreign currencies			—				49,299
Global ECS sales, constant currency		$	1,761,827			$	2,015,384			(12.6	)%
Americas ECS sales, as reported		$	1,015,924			$	1,234,158			(17.7	)%
Impact of changes in foreign currencies			—				(3,105	)
Americas ECS sales, constant currency		$	1,015,924			$	1,231,053			(17.5	)%
Europe ECS sales, as reported		$	745,903			$	731,927			1.9	%
Impact of changes in foreign currencies			—				52,404
Europe ECS sales, constant currency		$	745,903			$	784,331			(4.9	)%

ARROW ELECTRONICS, INC.
NON-GAAP SALES RECONCILIATION
(In thousands)
(Unaudited)
		Nine Months Ended
		September 30, 2023				October 1, 2022				% Change
Consolidated sales, as reported		$	25,257,963			$	27,801,399			(9.1	)%
Impact of changes in foreign currencies			—				(74,613	)
Consolidated sales, constant currency		$	25,257,963			$	27,726,786			(8.9	)%
Global components sales, as reported		$	19,783,867			$	21,960,974			(9.9	)%
Impact of changes in foreign currencies			—				(68,284	)
Global components sales, constant currency		$	19,783,867			$	21,892,690			(9.6	)%
Americas components sales, as reported		$	6,169,949			$	7,265,552			(15.1	)%
Impact of changes in foreign currencies			—				(2,265	)
Americas components sales, constant currency		$	6,169,949			$	7,263,287			(15.1	)%
Asia components sales, as reported		$	7,226,871			$	9,024,188			(19.9	)%
Impact of changes in foreign currencies			—				(115,290	)
Asia components sales, constant currency		$	7,226,871			$	8,908,898			(18.9	)%
Europe components sales, as reported		$	6,387,047			$	5,671,234			12.6	%
Impact of changes in foreign currencies			—				49,271
Europe components sales, constant currency		$	6,387,047			$	5,720,505			11.7	%
Global ECS sales, as reported		$	5,474,096			$	5,840,425			(6.3	)%
Impact of changes in foreign currencies			—				(6,329	)
Global ECS sales, constant currency		$	5,474,096			$	5,834,096			(6.2	)%
Americas ECS sales, as reported		$	3,014,544			$	3,442,803			(12.4	)%
Impact of changes in foreign currencies			—				(19,051	)
Americas ECS sales, constant currency		$	3,014,544			$	3,423,752			(12.0	)%
Europe ECS sales, as reported		$	2,459,552			$	2,397,622			2.6	%
Impact of changes in foreign currencies			—				12,722
Europe ECS sales, constant currency		$	2,459,552			$	2,410,344			2.0	%

ARROW ELECTRONICS, INC.
NON-GAAP EARNINGS RECONCILIATION
(In thousands except per share data)
(Unaudited)
Three months ended September 30, 2023
		Reported				Intangible				Restructuring
		GAAP				amortization				& Integration								Non-GAAP
		measure				expense				charges(1)				Other(2)				measure
Operating income		$	340,083			$	7,863			$	31,359			$	—			$	379,305
Income before income taxes			252,282				7,863				31,359				6,159				297,663
Provision for income taxes			52,241				1,959				7,321				1,476				62,997
Consolidated net income			200,041				5,904				24,038				4,683				234,666
Noncontrolling interests			1,382				138				—				—				1,520
Net income attributable to shareholders		$	198,659			$	5,766			$	24,038			$	4,683			$	233,146
Net income per diluted share (3)		$	3.53			$	0.10			$	0.43			$	0.08			$	4.14
Effective tax rate (4)			20.7	%															21.2	%

Three months ended October 1, 2022
		Reported				Intangible				Restructuring
		GAAP				amortization				& Integration								Non-GAAP
		measure				expense				charges(1)				Other(2)				measure
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	%

ARROW ELECTRONICS, INC.
NON-GAAP EARNINGS RECONCILIATION
(In thousands except per share data)
(Unaudited)
Nine months ended September 30, 2023
		Reported				Intangible				Restructuring
		GAAP				amortization				& Integration				Non-recurring								Non-GAAP
		measure				expense				charges(1)				tax items				Other(2)				measure
Operating income		$	1,154,485			$	23,751			$	44,252			$	—			$	—			$	1,222,488
Income before income taxes			914,325				23,751				44,252				—				(4,649	)			977,679
Provision for income taxes			201,168				5,961				10,638				(942	)			(1,114	)			215,711
Consolidated net income			713,157				17,790				33,614				942				(3,535	)			761,968
Noncontrolling interests			4,189				408				—				—				—				4,597
Net income attributable to shareholders		$	708,968			$	17,382			$	33,614			$	942			$	(3,535	)		$	757,371
Net income per diluted share (3)		$	12.28			$	0.30			$	0.58			$	0.02			$	(0.06	)		$	13.12
Effective tax rate (4)			22.0	%																			22.1	%

Nine months ended October 1, 2022
		Reported				Intangible				Restructuring
		GAAP				amortization				& Integration				Non-recurring								Non-GAAP
		measure				expense				charges(1)				tax items				Other(2)				measure
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	%

____________________

(1) Includes charges to increase the environmental remediation reserves in the amount of $20.9 million and $23.3 million for third quarter and first nine months of 2023, respectively and $1.9 million and $2.2 million for the third quarter and first nine months of 2022, respectively.

(2) Other includes (gain) loss on investments, net.

(3) The sum of the components for non-GAAP 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 and as a non-GAAP measure.

ARROW ELECTRONICS, INC.
SEGMENT INFORMATION
(In thousands)
(Unaudited)
		Quarter Ended								Nine Months Ended
		September 30, 2023				October 1, 2022				September 30, 2023				October 1, 2022
Sales:
Global components		$	6,245,192			$	7,300,347			$	19,783,867			$	21,960,974
Global ECS			1,761,827				1,966,085				5,474,096				5,840,425
Consolidated		$	8,007,019			$	9,266,432			$	25,257,963			$	27,801,399
Operating income (loss):
Global components (a)		$	379,053			$	494,587			$	1,177,906			$	1,518,423
Global ECS (b)			54,624				83,976				221,951				253,744
Corporate (c)			(93,594	)			(75,869	)			(245,372	)			(226,269	)
Consolidated		$	340,083			$	502,694			$	1,154,485			$	1,545,898

(a)		Global components operating income includes $62.2 million in settlement charges recorded as a reduction to operating expense for the third quarter and first nine months of 2023. Charges to increase the allowance for credit losses increased $16.8 million and $11.0 million for the third quarter and first nine months of 2023, respectively, relative to the year-earlier periods.
(b)		Global ECS operating income includes charges to increase the allowance for credit losses, which increased by $20.0 million and $26.8 million for the third quarter and first nine months of 2023, respectively, relative to the year-earlier periods.
(c)		Corporate operating loss includes restructuring, integration, and other charges of $31.4 million and $44.3 million for the third quarter and first nine months of 2023, respectively, and $3.6 million and $11.0 million for the third quarter and first nine months of 2022, respectively.

NON-GAAP SEGMENT RECONCILIATION
		Quarter Ended								Nine Months Ended
		September 30, 2023				October 1, 2022				September 30, 2023				October 1, 2022
Global components operating income, as reported		$	379,053			$	494,587			$	1,177,906			$	1,518,423
Intangible assets amortization expense			6,640				6,691				20,064				20,303
Global components non-GAAP operating income		$	385,693			$	501,278			$	1,197,970			$	1,538,726
Global ECS operating income, as reported		$	54,624			$	83,976			$	221,951			$	253,744
Intangible assets amortization expense			1,223				1,983				3,687				6,219
Global ECS non-GAAP operating income		$	55,847			$	85,959			$	225,638			$	259,963

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20231102315638/en/

Investors:

Anthony Bencivenga,

Vice President, Investor Relations

303-566-7456

Media:

John Hourigan,

Vice President, Public Affairs and Corporate Marketing

303-824-4586

Source: Arrow Electronics

FAQ

What were Arrow Electronics' sales in Q3 2023?

Arrow Electronics reported sales of $8.01 billion in Q3 2023.

What was the net income for Q3 2023?

Arrow Electronics reported a net income of $199 million in Q3 2023.

How did global components sales perform in Q3 2023?

Global components sales decreased by 14% YoY in Q3 2023.

What was the YoY change in global ECS sales in Q3 2023?

Global ECS sales decreased by 10% YoY in Q3 2023.

What is Arrow Electronics' outlook for Q4 2023?

Arrow Electronics expects consolidated sales of $7.50 billion to $8.10 billion and net income per share of $3.30 to $3.50 in Q4 2023.