Tear Sheet: Arrow Electronics Inc.

The company's revenue declined by 20% year over year in the first half of 2024 due to weak demand stemming from inventory normalization at its customers, which especially affected its global components segment. We expect Arrow's revenue will remain weak in the second half, relative to the prior year, but increase sequentially versus the first half due largely to seasonality in its enterprise computing solutions (ECS) business. Although we believe the cyclical downturn will persist over the next few quarters, we also note there are encouraging early signs of a recovery. The company improved its bookings across all regions and its total book-to-bill ratio approached parity as of June 2024. Therefore, we expect Arrow will increase its revenue next year

...September 25, 2024 S&P Global Ratings expects Arrow's revenue will decline by about 16% in 2024, due to a prolonged cyclical inventory correction, before expanding by 4%-6% in 2025. The company's revenue declined by 20% year over year in the first half of 2024 due to weak demand stemming from inventory normalization at its customers, which especially affected its global components segment. We expect Arrow's revenue will remain weak in the second half, relative to the prior year, but increase sequentially versus the first half due largely to seasonality in its enterprise computing solutions (ECS) business. Although we believe the cyclical downturn will persist over the next few quarters, we also note there are encouraging early signs of a recovery. The company improved its bookings across all regions and its total book-to-bill ratio approached parity as of June 2024. Therefore, we expect Arrow will increase its revenue next year under a more-normal demand environment, with Europe being the...

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