Arrow Electronics Q1 revenues came in ahead of forecast at $6.81 billion, a decline of 2% year on year.
“I am pleased we delivered both consolidated and segment revenue, as well as earnings per share, that exceeded our guidance ranges,” said Sean Kerins (pictured), Arrow’s President and Chief Executive Officer. “The relative outperformance was primarily driven by EMEA’s momentum in both segments, a healthy contribution from our value-added offerings, and continued performance in our ECS business.”
In Arrow’s global components business, “all three regions performed ahead of normal seasonal trends. Additionally, we saw sequential improvement in industrial markets, resilience in transportation, and solid IP&E results,” added Kerins.
Global component sales dipped 8% to $4.77 billion.
EMEA posted Q1 sales of $1.34 billion, a fall of 19.1% year on year, while sales in the Americas edged down 1.8% to $1.57 billion. Asia/Pacific sales slipped 3.6% to $1.87 billion.
Taking a closer look at the components market more broadly, Kerins said that leading indicators continue to trend positively. “Our book to bill ratios improved throughout the quarter and now sit at or above parity in all three regions. Even with steady and manageable lead times, our backlog is growing again and should contribute to improving visibility.”
Kerins also noted “that industry wide intelligence continues to indicate customer inventory levels in the areas of the market are trending for replenishment. Considering these and other factors, our guidance reflects our belief is that demand trends are at a cyclical turning point and the business is beginning to return to more normal seasonal patterns, creating a foundation for the future. As we move into the second quarter and consistent with the earlier stages of cyclical improvement, we do anticipate stronger trends in Asia and across the larger OEM customer base.”
Arrow’s global Enterprise Computing Services (ECS) business sparkled in Q1, delivering an 18% increase in revenues to $2.0 billion.
Kerins continued: “In our global ECS business, we delivered year-over-year growth in billings, gross profit, and operating income with good momentum both on-premise and in the Cloud. Additionally, we saw our backlog grow significantly, underscoring our differentiation in the market for IT-as-a-service.”
For Q2 Arrow is forecasting consolidated sales of $6.70 billion to $7.30 billion, with global components sales of $4.80 billion to $5.20 billion, and global enterprise computing solutions sales of $1.90 billion to $2.10 billion.
