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Arrow Electronics, Inc. (NYSE:ARW) today reported fourth-quarter 2021 sales of $9.02 billion, an increase of 7 percent from sales of $8.45 billion in the fourth quarter of 2020. Fourth-quarter 2021 net income was $371 million, or $5.26 per share on a diluted basis, compared with net income of $236 million, or $3.08 per share on a diluted basis, in the fourth quarter of 2020.
Fourth-quarter 2021 non-GAAP1 sales increased 8 percent from 2020. Non-GAAP net income1 was $379 million, or $5.37 per share on a diluted basis, in the fourth quarter of 2021, compared with non-GAAP net income of $243 million, or $3.17 per share on a diluted basis, in the fourth quarter of 2020. In the fourth quarter of 2021, changes in foreign currencies had negative impacts on growth of approximately $73 million on sales and $.07 on earnings per share on a diluted basis compared to the fourth quarter of 2020.
“Our fourth quarter and full year results demonstrate how we are leveraging Arrow’s extensive experience, deep industry knowledge, and expertise in design, engineering, and supply chain to help customers manage through the current market challenges. Arrow is uniquely positioned in the market and customers new and old are increasingly turning to our team, enabling us to build on our relationships and do even more business,” said Michael J. Long, chairman, president, and chief executive officer. “Our organization has worked hard to capture these tremendous opportunities and deliver full-year earnings per share that were more than 75 percent higher than our previous record year.”
Global components fourth-quarter sales of $6.68 billion increased 13 percent year over year. Non-GAAP sales increased 14 percent year over year. Americas components sales increased 32 percent year over year. Asia-Pacific components sales were flat year over year. Europe components sales increased 17 percent year over year. Non-GAAP sales in the region increased 21 percent year over year. Global components fourth-quarter operating income was $430 million. Fourth-quarter non-GAAP operating income was $437 million.
“Our past investments in Arrow’s sales, engineering and supply chain services combined with the current, favorable pricing environment are proving effective for global components,” continued Mr. Long. “As a result of our focused execution, global components delivered the highest margin levels in decades.”
Global enterprise computing solutions fourth-quarter sales of $2.34 billion decreased 8 percent year over year. Non-GAAP sales decreased 6 percent year over year. Europe enterprise computing solutions sales decreased 6 percent year over year. Non-GAAP sales in the region decreased 3 percent year over year. Americas enterprise computing sales decreased 9 percent year over year. Global enterprise computing solutions fourth-quarter operating income was $155 million. Fourth-quarter non-GAAP operating income was $157 million.
“Global enterprise computing solutions is poised for continued success in 2022 as the need for a trusted partner to help customers navigate IT complexity and security has never been greater,” said Mr. Long.
FULL-YEAR RESULTS
Full-year 2021 sales of $34.48 billion increased 20 percent from sales of $28.67 billion in 2020. Net income for 2021 was $1.11 billion, or $15.10 per share on a diluted basis, compared with net income of $584 million, or $7.43 per share on a diluted basis, in 2020.
Full-year 2021 non-GAAP sales increased 19 percent year over year. Non-GAAP net income was $1.14 billion, or $15.50 per share on a diluted basis, in 2021 compared with non-GAAP net income of $610 million, or $7.75 per share on a diluted basis, in 2020. In 2021, changes in foreign currencies had positive impacts on growth of approximately $403 million on sales, and $.14 on earnings per share on a diluted basis compared to 2020.
“We delivered on our commitment to return cash to shareholders while reducing leverage ratios, having returned approximately $250 million through Arrow’s stock repurchase program during the fourth quarter and approximately $900 million throughout 2021, the most we have ever returned in a single year,” said Chris Stansbury, senior vice president and chief financial officer. “These repurchases reflect our confidence in the business and Arrow’s growth potential. With return on invested capital and return on working capital each at record levels, we are pleased to utilize our cash to further enhance shareholder value.”
1 A reconciliation of non-GAAP financial measures, including sales, sales for each segment and in each region, gross profit, operating income, income before income taxes, provision for income taxes, net income, net income attributable to shareholders, and net income per share, to GAAP financial measures is presented in the reconciliation tables included herein.
FIRST-QUARTER 2022 OUTLOOK
- Consolidated sales of $8.35 billion to $8.95 billion, with global components sales of $6.675 billion to $6.975 billion, and global enterprise computing solutions sales of $1.675 billion to $1.975 billion
- Net income per share on a diluted basis of $4.32 to $4.48, and non-GAAP net income per share on a diluted basis1 of $4.44 to $4.60
- Average tax rate of approximately 23.5% percent compared to the long-term range of 23 to 25 percent
- Average diluted shares outstanding of 69 million
- Interest expense of approximately $35 million
- Expecting average USD-to-Euro exchange rate of $1.13 to €1; changes in foreign currencies to decrease sales by approximately $160 million, and earnings per share on a diluted basis by $.10 compared to the first quarter of 2021.
Tables and other information can be found here.
