Arrow Electronics Q1 Earnings Beat Estimates, Revenues Fall Y/Y

Arrow Electronics ARW reported adjusted earnings of $1.80 per share for the first quarter of 2025, which beat the Zacks Consensus Estimate by 22.45%. However, the bottom line declined 25.3% year over year.

In the first quarter, ARW reported revenues of $6.81 billion, reflecting a 1.6% year-over-year decline but surpassing the Zacks Consensus Estimate by 7.93%. At constant currency (cc), revenues decreased 0.4% year over year.

ARW’s earnings beat the Zacks Consensus Estimate in the trailing four quarters, the surprise being 12.54%, on average. (Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)

ARW’s Q1 Revenue Details

In the first quarter of 2025, Global Component sales decreased 8% year over year on a reported basis and 7% on a cc basis to $4.78 billion.

Arrow Electronics, Inc. Price, Consensus and EPS Surprise

 

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

Region-wise, revenues from EMEA declined 16.8%, and the same from the Americas and the Asia-Pacific regions fell 1.7% and 3.1%, respectively, at cc.

Global Enterprise Computing Solutions (ECS) revenues were $2.04 billion, which increased 17.5% year over year on a reported basis and 19.4% at cc.

Region-wise, the segment’s revenues from America and EMEA increased 1% and 40.1%, respectively, at cc.

ARW’s Q1 Operating Details

Consolidated non-GAAP gross margin was 11.3%, down 120 basis points on a year-over-year basis. The Global Components segment reported a non-GAAP gross margin of 11.6%, down 110 basis points, whereas the Global ECS segment saw its margin contract by 150 basis points to 10.8% year over year.

The non-GAAP operating income from Global Components and Global ECS was $173.4 million and $78.2 million, respectively. While Global Components’ operating income declined 28.5% year over year, Global ECS increased 7.9% year over year.

Arrow Electronics’ non-GAAP operating income plunged 28.7% year over year to $178.8 million in the first quarter of 2025. The non-GAAP operating margin shrank 100 basis points on a year-over-year basis to 2.6%.

Balance Sheet & Cash Flow

As of March 29, 2025, cash and cash equivalents totaled $231.9 million, which increased from $188.8 million as of Dec. 31, 2024.

The long-term debt was $2.31 billion, down from $2.77 billion at the end of the previous quarter.

In the reported quarter, cash flow from operations was $351.7 million compared with $326.5 million in the previous quarter.

In the first quarter of 2025, ARW repurchased $50 million of shares.

ARW Offers Positive Q2 Guidance

For the second quarter of 2025, sales are estimated between $6.70 billion and $7.30 billion.

Global Components sales are projected between $4.80 billion and $5.20 billion. Global ECS sales are anticipated between $1.90 billion and $2.10 billion.

Interest expenses are expected to be $60 million.

ARW anticipates non-GAAP earnings of $1.90-$2.10 per share.

Zacks Rank & Stocks to Consider

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

Affirm AFRM, NCR Atleos Corporation NATL and QuinStreet QNST are some better-ranked stocks in the broader Zacks Computer and Technology sector. AFRM and NATL sport a Zacks Rank #1 (Strong Buy), and QNST carries a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Affirm is scheduled to report third-quarter fiscal 2025 results on May 8. NCR Atleos is set to report first-quarter 2025 results on May 7, whereas QuinStreet is scheduled to report its third-quarter fiscal 2025 results on May 7.

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This article originally published on Zacks Investment Research (zacks.com).

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