Q1 2024 Arrow Electronics Inc Earnings Call Transcript
Key Points
- Arrow Electronics Inc (ARW) reported Q1 sales of $6.9 billion, aligning with expectations and achieving non-GAAP EPS of $2.41, above the high end of the guided range.
- The company successfully reduced its inventory by $390 million in Q1, continuing effective inventory management with a total reduction of over $1 billion in the past two quarters.
- Book-to-bill ratios have improved steadily across all operating regions since late Q3 of the previous year, approaching parity.
- Arrow Electronics Inc (ARW) saw design win counts grow sequentially in the West, indicating a pivot to new product design and introduction activities.
- The company generated strong cash flow during the quarter, amounting to $403 million from operations, enhancing financial flexibility for capital allocation priorities.
- Consolidated sales for Q1 were down 21% versus the prior year, with Global Components sales down 24% year-over-year due to ongoing semiconductor inventory correction.
- Enterprise Computing Solutions sales decreased by 8% year-over-year, influenced by a mix of product offerings and lower discretionary IT spending in North America.
- The company experienced a backlog decline, consistent with shorter lead times, although it remains above pre-pandemic levels.
- First quarter consolidated gross margin decreased by approximately 20 basis points year-over-year, primarily driven by the overall mix in the components business.
- Arrow Electronics Inc (ARW) expects Q2 global component sales to be down about 28% from the prior quarter, indicating continued challenges in the market.
Good day and welcome to the Arrow Electronics First Quarter 2024 Earnings Call. Today's conference is being recorded. And at this time, I would like to turn the conference over to Raj Agrawal, Senior Vice President and Chief Financial Officer. Please go ahead.
Thank you, operator and hello, everyone. Before we begin, I'd like to introduce our new Vice President of Investor Relations, Brad Windbigler. Brad is our current Treasurer and joined Arrow on May of last year. We're excited to have Brad lead Arrow's Investor Relations. And with that, I'll turn it over to him to get us started today.
Thank you, Raj. It's a pleasure to be here. I'd like to welcome everyone to the Arrow Electronics First Quarter 2024 Earnings Conference Call. In addition to Raj Agrawal, Arrow's Chief Financial Officer, joining me today on the call is our President and Chief Executive Officer, Sean Kerins; our President of Global Components, Rick Marano; and our President of
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