Arrow Electronics tops Q3 profit estimates as sales rise 39%

Arrow Electronics (ARW) topped third-quarter profit estimates and grew sales 39% from a year earlier as demand rose across both its components and computing businesses.

Here's how the company did:

• Non-GAAP diluted EPS: $6.22 vs. $2.41 a year earlier, $5.01 expected
• GAAP diluted EPS: $6.17 vs. $2.09 a year earlier
• Consolidated sales: $10.72 billion vs. $7.71 billion a year earlier, $10.11 billion expected
• Net income attributable to shareholders: $318 million vs. $109 million a year earlier

Currency changes reduced sales by $10.3 million in the quarter. Non-GAAP figures exclude intangible asset amortization and restructuring charges.

Segment results

Global Components sales rose 43% to $7.94 billion, and operating income reached $413 million, up from $197 million a year earlier.

Americas Components sales rose 58%. EMEA Components sales rose 41%, and Asia-Pacific Components sales rose 33%.

Interim chief executive officer Bill Austen said Global Components "continues to benefit from broad-based demand across geographies, customer segments and industry verticals."

Global Enterprise Computing Solutions, or ECS, sales rose 29% to $2.78 billion. Its gross billings increased 14%.

Global ECS operating income rose 54% to $98 million. EMEA ECS sales rose 30%, and Americas ECS sales rose 27%.

Costs and cash

Gross profit was $1.16 billion, up from $835 million a year earlier. Restructuring, integration and other charges fell to $5 million from $36 million.

Operations used $441 million of cash, mainly for working capital to support customer demand. Buybacks totaled $93 million.

Revenue has risen in each of the last three quarters, reaching $9.99 billion in the second quarter of fiscal 2026. Net income rose over the same period to $272.7 million from $109.2 million.

For the first nine months, sales rose 37% to $30.18 billion, and non-GAAP diluted EPS was $16.89, up from $6.64.

Fourth-quarter guidance

For the fourth quarter, the company expects consolidated sales of $11.55 billion to $12.15 billion. It expects Global Components sales of $8.15 billion to $8.55 billion and Global ECS sales of $3.40 billion to $3.60 billion.

The company expects GAAP diluted EPS of $6.25 to $6.45, and non-GAAP diluted EPS of $7.00 to $7.20.

It also expects an average tax rate of 23% to 25%, interest expense of about $50 million, and currency changes to reduce sales by about $88 million and diluted EPS by 14 cents, compared with the fourth quarter of 2025.