Arrow Electronics (NYSE:ARW) Posts Quarterly Earnings Results, Beats Expectations By $0.86 EPS

Key Points

• Arrow Electronics beat quarterly expectations: EPS rose 124% year over year to $5.45, exceeding consensus by $0.86, while revenue increased 32% to approximately $10 billion. Management guided to third-quarter EPS of $4.83–$5.03 and revenue of $9.6 billion–$10.2 billion.
• Demand remains strong across Global Components, driven by AI, data centers, aerospace and defense, industrial, and transportation markets. Book-to-bill ratios stayed above one, with backlog extending into the first half of 2027.
• Risks remain in the ECS business: operating margin declined after a $27 million charge tied to underperforming contracts, with smaller additional charges expected. Arrow also authorized a $1 billion share repurchase plan, while its stock fell 1.7% following the results.

Arrow Electronics (NYSE:ARW - Get Free Report) announced its quarterly earnings data on Thursday. The technology company reported $5.45 EPS for the quarter, beating analysts' consensus estimates of $4.59 by $0.86, FiscalAI reports. The firm had revenue of $9.99 billion for the quarter, compared to the consensus estimate of $9.67 billion. Arrow Electronics had a net margin of 2.17% and a return on equity of 11.40%. Arrow Electronics updated its Q3 2026 guidance to 4.830-5.030 EPS.

Here are the key takeaways from Arrow Electronics' conference call:

• Strong second-quarter results exceeded expectations, with revenue rising 32% year over year to $10 billion, operating margin expanding 120 basis points to 4%, and non-GAAP EPS increasing 124% to $5.45.
• Global Components remained broad-based and demand-driven, supported by AI and data center investment as well as aerospace and defense, industrial, and transportation markets. Book-to-bill ratios remained above one and backlog extended into the first half of 2027.
• Management expects continued momentum and operating leverage, guiding third-quarter revenue to $9.6 billion-$10.2 billion, or 28% year-over-year growth at the midpoint, while maintaining confidence in full-year ECS billings growth and strong component margins.
• ECS operating margin fell 100 basis points year over year after a $27 million charge tied to underperforming multi-year contracts; management expects additional, though smaller, charges in the second half while restructuring the partner relationship.
• The balance sheet strengthened, with gross debt down to $2.2 billion and adjusted leverage improving to 1.75 times. Arrow generated more than $1 billion of operating cash flow year to date and repurchased $43 million of shares during the quarter.

Arrow Electronics Stock Down 1.7%

Shares of ARW stock traded down $3.96 on Thursday, hitting $222.89. The company's stock had a trading volume of 750,253 shares, compared to its average volume of 637,220. The company has a debt-to-equity ratio of 0.35, a current ratio of 1.24 and a quick ratio of 1.02. Arrow Electronics has a fifty-two week low of $101.79 and a fifty-two week high of $237.33. The firm's fifty day moving average price is $215.85 and its 200-day moving average price is $179.75. The stock has a market capitalization of $11.40 billion, a price-to-earnings ratio of 15.94 and a beta of 1.20.

Arrow Electronics declared that its board has authorized a share repurchase plan on Wednesday, May 13th that allows the company to buyback $1.00 billion in outstanding shares. This buyback authorization allows the technology company to reacquire up to 9.7% of its stock through open market purchases. Stock buyback plans are often a sign that the company's management believes its shares are undervalued.

Insider Buying and Selling at Arrow Electronics

In other Arrow Electronics news, SVP Carine Lamercie Jean-Claude sold 3,000 shares of the stock in a transaction on Friday, May 22nd. The shares were sold at an average price of $216.00, for a total transaction of $648,000.00. Following the transaction, the senior vice president directly owned 12,626 shares of the company's stock, valued at $2,727,216. This represents a 19.20% decrease in their ownership of the stock. The transaction was disclosed in a filing with the SEC, which is available through the SEC website. Also, insider Eric Nowak sold 3,473 shares of the firm's stock in a transaction dated Wednesday, May 20th. The shares were sold at an average price of $210.99, for a total value of $732,768.27. Following the transaction, the insider owned 48,835 shares in the company, valued at approximately $10,303,696.65. This trade represents a 6.64% decrease in their ownership of the stock. Additional details regarding this sale are available in the official SEC disclosure. Corporate insiders own 0.80% of the company's stock.

Institutional Investors Weigh In On Arrow Electronics

Institutional investors and hedge funds have recently added to or reduced their stakes in the stock. AQR Capital Management LLC boosted its position in Arrow Electronics by 37.7% during the third quarter. AQR Capital Management LLC now owns 3,185,582 shares of the technology company's stock worth $384,818,000 after purchasing an additional 871,585 shares during the period. Dimensional Fund Advisors LP grew its stake in Arrow Electronics by 0.6% in the 4th quarter. Dimensional Fund Advisors LP now owns 2,995,615 shares of the technology company's stock valued at $330,068,000 after buying an additional 16,570 shares during the last quarter. FIL Ltd grew its stake in Arrow Electronics by 33.8% in the 4th quarter. FIL Ltd now owns 1,231,833 shares of the technology company's stock valued at $135,723,000 after buying an additional 310,936 shares during the last quarter. Sei Investments Co. raised its holdings in Arrow Electronics by 4.3% in the 3rd quarter. Sei Investments Co. now owns 814,794 shares of the technology company's stock worth $98,591,000 after acquiring an additional 33,481 shares during the period. Finally, Charles Schwab Investment Management Inc. raised its holdings in Arrow Electronics by 1.5% in the 4th quarter. Charles Schwab Investment Management Inc. now owns 528,776 shares of the technology company's stock worth $58,261,000 after acquiring an additional 7,588 shares during the period. 99.34% of the stock is currently owned by institutional investors and hedge funds.

Analysts Set New Price Targets

A number of equities research analysts have issued reports on ARW shares. Weiss Ratings reissued a "buy (b-)" rating on shares of Arrow Electronics in a research note on Tuesday, May 26th. Raymond James Financial reaffirmed an "outperform" rating and issued a $220.00 price target on shares of Arrow Electronics in a research note on Friday, May 8th. Zacks Research lowered Arrow Electronics from a "strong-buy" rating to a "hold" rating in a report on Monday. Truist Financial lifted their price objective on Arrow Electronics from $240.00 to $260.00 and gave the company a "buy" rating in a research report on Thursday, June 4th. Finally, Wells Fargo & Company upped their target price on Arrow Electronics from $165.00 to $175.00 and gave the stock an "underweight" rating in a research report on Monday, July 20th. Three analysts have rated the stock with a Buy rating, two have assigned a Hold rating and one has issued a Sell rating to the company. Based on data from MarketBeat.com, the stock has an average rating of "Hold" and a consensus target price of $222.00.

About Arrow Electronics

Arrow Electronics NYSE: ARW is a global provider of products, services and solutions to industrial and commercial users of electronic components and enterprise computing solutions. The company offers a broad portfolio of semiconductors, passives, connectors, electromechanical devices and embedded solutions, serving customers across diverse end markets including automotive, communications, computing, aerospace, defense and healthcare. Through its extensive supplier relationships, Arrow enables design engineers to identify and procure components required for the development of new electronic systems and devices.

In addition to component distribution, Arrow delivers value-added services such as design engineering support, supply chain management, global logistics and technical training.

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