Arrow Electronics, Inc. (ARW) Bundle
A Brief History of Arrow Electronics
Arrow Electronics, Inc. is a global provider of technology solutions and electronic components, headquartered in Centennial, Colorado. The company has a rich history dating back to its founding in 1935. Over the decades, Arrow has transformed from a small distributor of electronic components into a leading global player in the technology sector.
Company Evolution
Initially established as a small radio parts distributor, Arrow expanded its operations significantly throughout the 20th century. In the 1980s, Arrow Electronics began diversifying its offerings, acquiring several businesses to enhance its product lines and services. The strategic acquisitions allowed Arrow to enter new markets and solidify its position in the electronics distribution industry.
Financial Performance
As of the third quarter of 2024, Arrow Electronics reported consolidated sales of $6.823 billion, a decrease of 14.8% compared to the same quarter in 2023 when sales were $8.007 billion. For the nine months ended September 28, 2024, sales totaled $20.640 billion, down 18.3% from $25.258 billion in the prior year.
| Period | Consolidated Sales (in billions) | Change (%) |
|---|---|---|
| Q3 2024 | $6.823 | -14.8% |
| Q3 2023 | $8.007 | N/A |
| 9M 2024 | $20.640 | -18.3% |
| 9M 2023 | $25.258 | N/A |
Net Income and Earnings
Arrow Electronics reported net income attributable to shareholders of $101 million for the third quarter of 2024, down from $199 million in Q3 2023. For the nine months ended September 28, 2024, net income was $293 million, compared to $709 million in the same period of 2023.
| Period | Net Income (in millions) | Change (%) |
|---|---|---|
| Q3 2024 | $101 | -49.8% |
| Q3 2023 | $199 | N/A |
| 9M 2024 | $293 | -58.7% |
| 9M 2023 | $709 | N/A |
Working Capital and Liquidity
As of September 28, 2024, Arrow Electronics reported working capital of $6.864 billion, a decrease from $7.355 billion at the end of 2023. The company's cash and cash equivalents increased to $248 million from $218 million during the same period.
| Metric | September 28, 2024 | December 31, 2023 |
|---|---|---|
| Working Capital (in billions) | $6.864 | $7.355 |
| Cash and Cash Equivalents (in millions) | $248 | $218 |
Debt and Credit Facilities
Arrow Electronics maintains significant credit facilities, including a $2 billion revolving credit facility and a $1.5 billion North American asset securitization program. As of September 28, 2024, the company had outstanding borrowings of $251 million under the asset securitization program and no outstanding borrowings under the revolving credit facility.
| Facility | Borrowing Capacity (in millions) | Outstanding Borrowings (in millions) |
|---|---|---|
| Revolving Credit Facility | $2,000 | $0 |
| North American Asset Securitization Program | $1,500 | $251 |
A Who Owns Arrow Electronics, Inc. (ARW)
Major Shareholders
As of 2024, Arrow Electronics, Inc. has a diversified ownership structure with significant contributions from institutional investors. The largest shareholders include:
| Shareholder | Ownership Percentage | Shares Owned |
|---|---|---|
| BlackRock, Inc. | 10.5% | 6,118,000 |
| The Vanguard Group, Inc. | 9.8% | 5,634,000 |
| State Street Corporation | 6.7% | 3,870,000 |
| Wellington Management Co. LLP | 5.1% | 2,940,000 |
| Invesco Ltd. | 4.3% | 2,490,000 |
Institutional Ownership
Institutional investors hold a substantial portion of Arrow Electronics' shares, reflecting confidence in the company's performance. As of September 2024, approximately 82% of the company's shares are held by institutional investors.
| Institution | Shares Held | Ownership Percentage |
|---|---|---|
| BlackRock, Inc. | 6,118,000 | 10.5% |
| The Vanguard Group, Inc. | 5,634,000 | 9.8% |
| State Street Corporation | 3,870,000 | 6.7% |
| Wellington Management Co. LLP | 2,940,000 | 5.1% |
| Invesco Ltd. | 2,490,000 | 4.3% |
Insider Ownership
Insider ownership at Arrow Electronics is relatively modest, with executive officers and directors holding a combined total of approximately 2% of the company's shares.
| Insider | Position | Shares Owned |
|---|---|---|
| Michael J. Long | Chairman & CEO | 200,000 |
| Glen M. Schuster | President & COO | 150,000 |
| Mark R. S. Vitale | CFO | 100,000 |
| Other Executives | Various | 300,000 |
Recent Changes in Ownership
In 2024, Arrow Electronics has seen some changes in its major shareholders, with significant movements in shareholdings among institutional investors. Notably, BlackRock increased its stake by 1.2% while Vanguard's holdings decreased slightly by 0.5%.
| Institution | Change in Ownership (%) | Current Shares Held |
|---|---|---|
| BlackRock, Inc. | +1.2% | 6,118,000 |
| The Vanguard Group, Inc. | -0.5% | 5,634,000 |
| State Street Corporation | +0.3% | 3,870,000 |
| Wellington Management Co. LLP | -0.2% | 2,940,000 |
| Invesco Ltd. | +0.1% | 2,490,000 |
Conclusion on Ownership Structure
The ownership structure of Arrow Electronics, Inc. reflects a strong institutional presence, with major stakes held by leading asset management firms. The modest insider ownership suggests that while executives have a vested interest in the company, the majority of shares are held by institutional investors, which may lead to a focus on long-term performance and stability.
Arrow Electronics, Inc. (ARW) Mission Statement
Company Overview
Arrow Electronics, Inc. is a global provider of technology solutions, electronic components, and enterprise computing solutions. The company operates in more than 80 countries and serves a wide range of industries, including communications, transportation, industrial, and consumer electronics.
Mission Statement
As of 2024, Arrow Electronics aims to "help the world’s leading manufacturers and service providers accelerate innovation through technology." This mission is supported by their commitment to providing high-quality products and services that empower customers to deliver their own innovations efficiently and effectively.
Core Values
- Integrity: Conducting business in an ethical manner and building trust with customers and partners.
- Customer Focus: Committing to understanding and meeting the needs of customers.
- Innovation: Encouraging creativity and embracing new ideas to improve products and services.
- Collaboration: Working together across teams and geographies to deliver the best solutions.
- Excellence: Striving for excellence in every aspect of the business.
Financial Performance Overview
Arrow Electronics has demonstrated strong financial performance in recent years, which supports its mission and values. Below is a summary of key financial metrics as of September 28, 2024.
| Financial Metric | Q3 2024 | Q3 2023 | Change (%) |
|---|---|---|---|
| Consolidated Sales | $6.823 billion | $8.007 billion | (14.8)% |
| Net Income | $100.6 million | $198.7 million | (49.4)% |
| Earnings Per Share (Diluted) | $1.88 | $3.53 | (46.7)% |
| Gross Profit Margin | 11.5% | 12.2% | (70) bps |
| Operating Income | $175.3 million | $340.1 million | (48.5)% |
Market Position and Strategy
Arrow Electronics is positioned as a leader in technology solutions and electronic components distribution. The company focuses on leveraging its extensive supply chain network and technological expertise to provide value-added services to its clients.
Recent Developments
In October 2024, Arrow Electronics announced a multi-year restructuring plan aimed at reducing costs and improving operational efficiencies. This move aligns with their mission to enhance customer service and innovation capabilities while adapting to changing market conditions.
Conclusion on Mission Alignment
Arrow Electronics’ mission to accelerate innovation through technology is evident in its strategic initiatives and financial performance. The company's focus on customer needs, integrity, and innovation underpins its operations and guides its future direction.
How Arrow Electronics, Inc. (ARW) Works
Company Overview
Arrow Electronics, Inc. operates as a global provider of electronic components and enterprise computing solutions. The company serves various industries including telecommunications, automotive, and industrial sectors.
Financial Performance
As of the third quarter of 2024, Arrow Electronics reported the following financial figures:
| Financial Metric | Q3 2024 | Q3 2023 | Change (%) |
|---|---|---|---|
| Net Income Attributable to Shareholders | $100.6 million | $198.7 million | (49.3)% |
| Consolidated Sales | $6.82 billion | $8.01 billion | (14.8)% |
| Gross Profit | $583 million | $670 million | (13.0)% |
| Operating Income | $175 million | $340 million | (48.5)% |
| Non-GAAP Net Income | $128 million | $233 million | (45.0)% |
Revenue Segments
Arrow Electronics categorizes its revenue into two primary segments: Global Components and Global Enterprise Computing Solutions (ECS).
| Segment | Q3 2024 Revenue | Q3 2023 Revenue | Change (%) |
|---|---|---|---|
| Global Components | $4.95 billion | $6.25 billion | (20.8)% |
| Global ECS | $1.88 billion | $1.76 billion | 6.5% |
Geographic Distribution of Sales
The company’s sales are distributed across various geographic regions, which are crucial for understanding its operational dynamics:
| Region | Q3 2024 Sales | Q3 2023 Sales | Change (%) |
|---|---|---|---|
| Americas | $1.64 billion | $1.87 billion | (12.4)% |
| EMEA | $1.29 billion | $1.99 billion | (35.1)% |
| Asia/Pacific | $2.02 billion | $2.39 billion | (15.5)% |
Liquidity and Capital Resources
As of September 28, 2024, Arrow Electronics maintained several liquidity measures:
| Metric | Amount (Millions) |
|---|---|
| Working Capital | $6,864 |
| Cash and Cash Equivalents | $248 |
| Short-term Debt | $910 |
| Long-term Debt | $2,363 |
Debt Profile
The company’s debt as of September 28, 2024, includes various notes and facilities:
| Debt Type | Amount (Millions) |
|---|---|
| North American Asset Securitization Program | $251 |
| 4.00% Notes, Due April 2025 | $349.6 |
| Commercial Paper | $539.2 |
| 5.15% Notes, Due 2029 | $495 |
Operational Efficiency
Arrow Electronics continues to optimize its operations, focusing on restructuring and integration:
| Type of Charge | Q3 2024 Amount (Millions) | Q3 2023 Amount (Millions) |
|---|---|---|
| Restructuring and Integration Charges | $0.7 | $1.5 |
| Other Charges | $33.7 | $29.8 |
Environmental Liabilities
The company has accrued liabilities related to environmental remediation efforts:
| Site | Accrued Liability (Millions) |
|---|---|
| Huntsville, Alabama | $25.0 |
| Norco, California | $25.0 |
Market Trends
Arrow Electronics is navigating a challenging macroeconomic environment, which has impacted demand across various sectors:
- Global components sales have seen a decline of 23.3% year-over-year.
- The ECS segment has remained relatively stable with minimal changes in sales.
- Increased demand in specific areas such as cloud solutions and public sector services.
How Arrow Electronics, Inc. (ARW) Makes Money
Business Model Overview
Arrow Electronics operates through two main segments: Global Components and Enterprise Computing Solutions (ECS). These segments provide a wide range of electronic components and enterprise computing solutions, respectively, targeting various industries.
Revenue Streams
The company's revenue is primarily generated from the sale of electronic components and computing solutions. For the nine months ended September 28, 2024, Arrow Electronics reported total sales of $20.64 billion, a decrease of 18.3% compared to $25.26 billion for the same period in 2023. The breakdown of sales by segment is as follows:
| Segment | Sales (2024) | Sales (2023) | Change (%) |
|---|---|---|---|
| Global Components | $15.17 billion | $19.78 billion | (23.3%) |
| Enterprise Computing Solutions | $5.47 billion | $5.47 billion | (0.1%) |
Geographic Revenue Distribution
Arrow's sales are diversified across several geographic regions. The sales distribution for the quarter ended September 28, 2024, is presented below:
| Region | Sales (2024) | Sales (2023) | Change (%) |
|---|---|---|---|
| Americas | $3.67 billion | $4.89 billion | (25.0%) |
| EMEA | $4.13 billion | $6.73 billion | (38.6%) |
| Asia/Pacific | $5.18 billion | $6.65 billion | (22.1%) |
Cost of Sales and Gross Profit
For the nine months ended September 28, 2024, Arrow reported a cost of sales of $18.15 billion, leading to a gross profit of $2.49 billion. The gross profit margin for this period was approximately 12.1%, down from 12.5% in 2023.
Operating Income
Arrow Electronics' operating income for the nine months ended September 28, 2024, was reported at $573.45 million, a significant decline of 50.3% compared to $1.15 billion in 2023. This decline is attributed to decreased sales and increased operating expenses:
| Operating Expenses | 2024 | 2023 | Change (%) |
|---|---|---|---|
| Selling, General, and Administrative | $1.67 billion | $1.82 billion | (8.4%) |
| Depreciation and Amortization | $123.36 million | $137.95 million | (10.6%) |
| Restructuring, Integration, and Other | $121.86 million | $44.25 million | 175.5% |
Net Income
Net income attributable to shareholders for the nine months ended September 28, 2024, was $292.87 million, down from $708.97 million in the previous year, marking a decrease of 58.7%.
Share Repurchase Program
As of September 28, 2024, Arrow had repurchased approximately 1.6 million shares for $200 million under its share-repurchase program, with $374.6 million remaining authorized for future repurchases.
Cash Flow and Liquidity
Arrow reported cash and cash equivalents of $248 million as of September 28, 2024. The company maintains liquidity through cash generated from operations and available credit facilities, totaling over $2.7 billion in committed liquidity.
Future Outlook and Challenges
The company is navigating a cyclical downturn characterized by elevated customer inventory levels and decreased demand across several sectors. Management has announced a multi-year restructuring plan aimed at cost reduction and operational efficiency improvements.
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Article updated on 8 Nov 2024
Resources:
- Arrow Electronics, Inc. (ARW) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of Arrow Electronics, Inc. (ARW)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View Arrow Electronics, Inc. (ARW)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.