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Investing.com -- Arrow Electronics , Inc. (NYSE:ARW) reported second-quarter earnings that exceeded analyst expectations, but shares tumbled 5.9% after the company issued disappointing earnings guidance for the third quarter.
The global technology solutions provider reported adjusted earnings per share of $2.43 for the second quarter, significantly beating the analyst estimate of $2.06. Revenue came in at $7.58 billion, surpassing the consensus estimate of $7.15 billion and representing a 10% increase YoY.
Despite the strong quarterly performance, investors focused on Arrow’s third-quarter guidance, which fell short of expectations. The company forecasts adjusted EPS of $2.16-$2.36, below the consensus estimate of $2.56, while projecting revenue between $7.3-$7.9 billion, which is in line with the $7.277 billion consensus.
"I am pleased to report we delivered both consolidated and segment revenues, as well as earnings per share, that exceeded our guidance ranges," said Sean Kerins, Arrow’s president and chief executive officer.
The company’s global components business saw sales increase 5% YoY to $5.285 billion, with particularly strong momentum in Asia. Meanwhile, the global enterprise computing solutions segment experienced robust growth with sales jumping 23% YoY to $2.295 billion.
"In our global ECS business, we delivered year-over-year growth in billings and gross profit. Additionally we saw robust growth in our IT as-a-service backlog, alongside continued adoption of our digital platform, Arrowsphere," Kerins added.
Arrow reported improvements in operational efficiency, with increased inventory turns, reduced cash conversion cycle, and improved returns on capital. The company also repurchased $50 million of shares during the quarter.
For the third quarter, Arrow expects changes in foreign currencies to increase sales by approximately $135 million compared to the same period last year, while also boosting earnings per share by $0.11.
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