Arrow Electronics (NYSE:ARW) Releases Quarterly Earnings Results, Beats Estimates By $1.16 EPS

Key Points

• Arrow Electronics reported record third-quarter revenue of $10.72 billion, up 39% year over year, and EPS of $6.22, beating the $5.06 analyst estimate by $1.16.
• The company forecast fourth-quarter revenue of $11.55 billion to $12.15 billion and EPS of $7.00 to $7.20, both above analyst expectations. Management cited strong demand and backlog, with Global Components backlog extending into mid-2027.
• Despite the results and upbeat guidance, shares fell 12.7% during Thursday trading. A roughly $900 million sequential increase in working capital, including inventory buildup, contributed to negative Q3 operating cash flow of $441 million.

Arrow Electronics (NYSE:ARW - Get Free Report) released its quarterly earnings results on Thursday. The technology company reported $6.22 EPS for the quarter, beating analysts' consensus estimates of $5.06 by $1.16, FiscalAI reports. The business had revenue of $10.72 billion during the quarter, compared to analyst estimates of $10.07 billion. Arrow Electronics had a return on equity of 13.41% and a net margin of 2.26%. Arrow Electronics's quarterly revenue was up 39.0% compared to the same quarter last year. During the same quarter in the prior year, the company posted $2.41 EPS. Arrow Electronics updated its Q4 2026 guidance to 7.000-7.200 EPS.

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

• Arrow reported record Q3 revenue of $10.7 billion, up 39% year over year, and record non-GAAP EPS of $6.22, up 158%. Operating margin expanded 130 basis points to 4.1%, reflecting operating leverage and strong volume.
• Management cited broad-based strength in Global Components, with book-to-bill well above parity, backlog extending into mid-2027, and continued growth across regions and end markets. Higher memory prices boosted Q3 revenue and profit dollars, though Q4 growth is expected to be driven mainly by unit volume.
• Q4 revenue guidance is $11.55 billion to $12.15 billion, up 36% year over year at the midpoint, with non-GAAP EPS of $7.00 to $7.20. ECS demand and backlog conversion were strong, and management expects Q4 billings-based ECS margins to be roughly flat year over year.
• Working capital rose about $900 million sequentially, including a $1.4 billion inventory increase; operating cash flow was negative $441 million in Q3. Management said roughly $600 million of the inventory build supported Arrow Intelligence Solutions orders expected to ship in coming quarters, but the build weighed on near-term cash flow.
• Greater hardware mix is expected to keep ECS’s Q4 reported operating margin below its historical level of about 6%, although management said billings-based margins remain healthy. The favorable Q3 tax settlement also contributed to EPS exceeding guidance and is not presented as a recurring driver.

Arrow Electronics Stock Down 12.7%

NYSE:ARW traded down $25.72 during mid-day trading on Thursday, hitting $176.91. 1,103,502 shares of the company's stock were exchanged, compared to its average volume of 609,445. The company has a market cap of $9.00 billion, a PE ratio of 11.30, a P/E/G ratio of 0.31 and a beta of 1.20. The company has a debt-to-equity ratio of 0.29, a current ratio of 1.22 and a quick ratio of 1.01. Arrow Electronics has a one year low of $101.79 and a one year high of $249.43. The business has a fifty day moving average price of $219.06 and a 200 day moving average price of $191.69.

Arrow Electronics News Summary

Here are the key news stories impacting Arrow Electronics this week:

• Positive Sentiment: Third-quarter EPS was $6.22, beating the cited consensus estimate of $5.06, while revenue of $10.72 billion topped estimates of $10.07 billion and rose 39% year over year. The company described the quarter as a record, with momentum in both Global Components and Global Enterprise Computing Solutions. Arrow Electronics reports record quarterly revenue and EPS
• Positive Sentiment: Fourth-quarter guidance substantially exceeded consensus: Arrow forecast EPS of $7.00–$7.20 versus $5.80 expected, and revenue of $11.6–$12.2 billion versus $10.5 billion expected. The stronger outlook signals management expects continued earnings and sales momentum. Arrow Electronics Q3 profit jumps, issues Q4 outlook
• Negative Sentiment: Despite the earnings beat and upbeat outlook, ARW traded lower during the session. The supplied coverage does not specify what drove the weaker market reaction, so the price move may reflect factors beyond the reported results.

Insider Activity

In other news, SVP Carine Jean-Claude sold 1,000 shares of the business's stock in a transaction that occurred on Thursday, September 3rd. The stock was sold at an average price of $209.85, for a total value of $209,850.00. Following the sale, the senior vice president directly owned 11,626 shares of the company's stock, valued at $2,439,716.10. The trade was a 7.92% decrease in their position. The sale was disclosed in a document filed with the SEC, which is available through the SEC website. Insiders own 0.80% of the company's stock.

Analyst Ratings Changes

A number of research analysts have issued reports on the stock. Truist Financial reduced their price objective on shares of Arrow Electronics from $260.00 to $250.00 and set a "buy" rating on the stock in a research report on Friday, August 7th. Weiss Ratings raised shares of Arrow Electronics from a "buy (b-)" rating to a "buy (b)" rating in a research report on Thursday, October 8th. Zacks Research lowered shares of Arrow Electronics from a "strong-buy" rating to a "hold" rating in a research note on Monday, October 26th. Wall Street Zen cut shares of Arrow Electronics from a "strong-buy" rating to a "buy" rating in a research report on Saturday, September 19th. Finally, Wells Fargo & Company increased their price target on shares of Arrow Electronics from $175.00 to $200.00 and gave the stock an "underweight" rating in a research note on Friday, August 7th. Three research analysts have rated the stock with a Buy rating, two have issued a Hold rating and one has assigned a Sell rating to the company's stock. According to data from MarketBeat, the stock presently has a consensus rating of "Hold" and a consensus target price of $233.25.

About Arrow Electronics

Arrow Electronics, Inc is a global distributor of electronic components and enterprise computing solutions. The company connects manufacturers of technology products with customers, including original equipment manufacturers, contract manufacturers, commercial enterprises and government organizations.

Arrow's components business distributes products such as semiconductors, embedded systems, passive and electromechanical components, and related engineering services. Its enterprise computing solutions business provides technology products and services involving data center, cloud, security, networking and software solutions.

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