Arrow Electronics ARW shares fell 2.5% to close at $106.98 on Friday following its disappointing fourth-quarter 2024 results. The company reported adjusted earnings of $2.38 per share, which beat the Zacks Consensus Estimate by 10.41%. The bottom line declined 25.4% year over year. 

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

In the fourth quarter, ARW reported revenues of $7.28 billion, down 7.2% year over year. However, the top line beat the Zacks Consensus Estimate by 4.09%.

ARW’s Q4 Revenue Details

In the fourth quarter of 2024, Global Component sales decreased 14.6% year over year on a reported basis and 14.4% on a constant currency (cc) basis to $4.81 billion. 

Region-wise, the segment’s revenues from EMEA declined 24.9%, as well as sales from the Americas and Asia-Pacific regions plunged 10.1% and 9.8%, respectively, at cc.

Global Enterprise Computing Solutions (ECS) revenues were $2.47 billion, which increased 11.6% year over year and 12.4% at cc. 

Region-wise, the segment’s revenues from America and EMEA increased 1.7% and 24%, respectively, at cc.

ARW’s Q4 Operating Details

The non-GAAP operating income from Global Components and Global ECS was $173 million and $161 million, respectively. While Global Components’ operating income declined 39.9% year over year, Global ECS jumped 10.3%.

Arrow Electronics’ non-GAAP operating income plunged 24.8% year over year to $273.7 million in the fourth quarter of 2024. The non-GAAP operating margin shrunk 90 basis points on a year-over-year basis to 3.8%.

ARW's Balance Sheet and Cash Flow

Arrow Electronics exited the fourth quarter with cash and cash equivalents of $188.8 million compared with the previous quarter’s $248 million.

The long-term debt was $2.77 billion, down from $2.36 billion at the end of the previous quarter.

Operating cash flow was $326 million in the fourth quarter of 2024.

In the fourth quarter of 2024, ARW returned $50 million to its shareholders through share repurchases.

ARW Offers Positive Q1 Guidance

For the first quarter of 2025, sales are estimated between $5.98 billion and $6.58 billion.

Global Components sales are projected in the band of $4.35 billion and $4.75 billion. Global ECS sales are anticipated to be between $1.63 billion and $1.83 billion.

Interest expenses are expected to be between $60 million and $65 million. 

ARW expects non-GAAP earnings in the band of $1.30-$1.50 per share.

Zacks Rank & Stocks to Consider

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

Arista Networks ANET, Twilio TWLO and DoorDash DASH are some better-ranked stocks in the broader sector. While ANET and TWLO sport a Zacks Rank #1 (Strong Buy) each, DASH carries a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Arista Networks is scheduled to report its fourth-quarter 2024 results on Feb. 18. Twilio is set to report fourth-quarter 2024 results on Feb. 13, while DoorDash is scheduled to report its fourth-quarter 2024 results on Feb. 11.

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