Key Factors To Drive Arrow Electronics' (ARW) Q4 Earnings

Arrow Electronics, Inc. (NYSE:ARW) is slated to release fourth-quarter 2017 results on Feb 6. The question lingering in investors’ minds is whether this electronic component distributor will be able to post a positive earnings surprise in the to-be-reported quarter. Notably, the company has a mixed earnings surprise history. Over the trailing four quarters, the company’s results surpassed the Zacks Consensus Estimate in two occasions, matched in another and missed in the other. So, let’s see how things are shaping up prior to this announcement.

What to Expect?

The Zacks Consensus Estimate for the quarter under review is pegged at $2.30, representing year-over-year growth of 15%. We note that the Zacks Consensus Estimate has been revised upward over the past 30 days. Additionally, analysts polled by Zacks project revenues of roughly $7.45 billion, up 15.6% from the year-ago quarter.

Let’s take a look at the driving factors this quarter.

Factors to Consider

Arrow Electronics’ continued efforts to maximize consumer satisfaction have resulted in original equipment manufacturers, contract manufacturers and commercial customers selecting Arrow’s distribution channels for marketing products. Further, the company’s core strength in providing best-in-class services and easy-to-acquire technologies are anticipated to drive fourth-quarter revenues.

Additionally, Arrow Electronics’ acquisition spree has helped it enter new markets, diversify and broaden product portfolio, along with maintaining the leading position, thereby significantly contributing to the company’s revenue stream. We expect that incremental sales from strategic acquisitions and partnerships will prove conducive to the fourth-quarter top-line performance.

Furthermore, the company’s efforts toward gaining traction in the Internet of Things (IoT) space are likely to boost fourth-quarter results. Over the past year, the company has made several partnerships with the likes of International Business Machines (NYSE:IBM) and Ingenu in a bid to enhance its IoT capabilities.

Arrow Electronics, Inc. Price and EPS Surprise

Arrow Electronics, Inc. Price and EPS Surprise | Arrow Electronics, Inc. Quote

What the Zacks Model Unveils?

Our proven model conclusively shows that Arrow Electronics is likely to beat earnings estimates this quarter. Per our model, a stock with a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or at least 3 (Hold), has higher chance of beating estimates. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter. Arrow Electronics carries a Zacks Rank #3 and has an ESP of +0.61%.

Other Stocks With Favorable Combination

Here are some companies you may want to consider as our model shows that these have the right combination of elements to post an earnings beat:

NVIDIA Corporation (NASDAQ:NVDA) has an Earnings ESP of +4.71% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

GrubHub Inc. (NYSE:GRUB) has an Earnings ESP of +5.39% and a Zacks Rank #2.

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