Arrow Electronics Reports 15.7% Revenue Decline and 56.6% Drop in Net Income for Fiscal Year 2024

Arrow Electronics, Inc. reported a significant decline in its financial performance for the fiscal year ending December 31, 2024, with consolidated sales of $27.9 billion, a decrease of 15.7% from $33.1 billion in 2023. The company's net income attributable to shareholders also fell sharply, down 56.6% to $392 million, or $7.29 per diluted share, compared to $904 million, or $15.84 per diluted share, in the previous year. The decline in revenue was primarily driven by a 21.4% drop in sales from the global components segment, which accounted for approximately 72% of total sales, while the global ECS segment saw a modest increase of 3.3%.

The downturn in the global components segment was attributed to elevated customer inventory levels and a challenging macroeconomic environment, which negatively impacted demand for semiconductor products. The company noted that sales in the Americas, EMEA, and Asia/Pacific regions all experienced declines, with the most significant drop occurring in the EMEA region, where sales fell by 30.1%. In contrast, the global ECS segment benefited from increased demand for infrastructure applications and hybrid-cloud solutions, particularly in the EMEA region.

In response to the challenging market conditions, Arrow announced the initiation of an Operating Expense Efficiency Plan on October 31, 2024, aimed at reducing costs and improving operational efficiencies. The plan is expected to incur pre-tax restructuring charges of approximately $185 million and aims to achieve annual operating expense reductions of $90 million to $100 million by the end of fiscal year 2026. The company also reported a decrease in operating income, which fell by 47.8% to $769 million, reflecting the impact of lower sales and gross profit margins.

As of December 31, 2024, Arrow employed approximately 21,520 individuals globally, with a significant presence in the Americas, EMEA, and Asia/Pacific regions. The company continues to focus on strategic acquisitions to enhance its product offerings and market penetration, while also investing in technology to support automation and process improvements. Looking ahead, Arrow anticipates that the current downturn in the semiconductor market may persist into 2025, with the duration and severity of the downturn remaining uncertain. The company remains committed to improving operational efficiency and capturing growth opportunities across its business segments.