Arrow Electronics has reported Q3 sales of $6.82 billion, a decline of 15% year on year.
“In the third quarter, the company continued to execute well in a challenging environment. While the cyclical correction continues in our global components business, we saw enterprise IT spending gain momentum,” said Sean Kerins, Arrow’s President and Chief Executive Officer. “I am pleased that we delivered revenue above the midpoint of our guidance range and non-GAAP earnings per diluted share ahead of our expectations.”
“In our global components business, the broader ecosystem inventory correction persists. Given the market environment, we remain focused on our suppliers and customers while managing the operational factors within our control,” added Kerins.
In the third quarter of 2024, global components sales decreased 21% year over year. Americas components third-quarter sales decreased 12% year over year to $1.63 billion. EMEA components third-quarter sales plummeted 35% year over year to $1.29 billion. Asia-Pacific components third-quarter sales fell 15% year over year to $2.01 billion.
The company saw sequential growth in the Americas with strength across several vertical sectors lead by aerospace and defence, while the industrial market declined.
Asia saw mixed patterns but stability overall and delivered continued IP&E revenue growth and relative strength in transportation.
EMEA continued broad-based declines from later cycle entry.
Global ECS Q3 sales increased 7% year over year to $1.87 billion.
“We saw better momentum and strong sales growth in our global ECS business, highlighted by a healthy market for hybrid cloud solutions, steady market dynamics in Europe, and an improving trajectory for us in North America,” explained Kerins.
For Q4 Arrow is estimating consolidated sales of $6.67 billion to $7.27 billion, with global components sales of $4.50 billion to $4.90 billion, and global enterprise computing solutions sales of $2.17 billion to $2.37 billion
As part of an ongoing effort to simplify its operations, Arrow plans to restructure its business to drive additional cost savings.
In addition to actions taken to date, the company estimates total restructuring expenses over the next two years of $185 million, including costs of $135 million for efficiency initiatives, as well as costs of approximately $50 million to exit certain lines of non-core business.
The company has identified opportunities to reduce annual operating expenses by the end of 2026 by approximately $90 million to $100 million, primarily related to reorganizing and consolidating certain areas of the company’s operations.
