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CDW Corporation (CDW) to Post Q4 Earnings: What's in Store?

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CDW Corporation (CDW - Free Report) is scheduled to report fourth-quarter 2017 financial numbers on Feb 7, before the opening bell. Last quarter, the company delivered a positive earnings surprise. Notably, the company’s earnings surpassed the Zacks Consensus Estimate in two of the trailing four quarters and came in line with the other two. It has an average earnings surprise of 2.5%.

Let’s see how things are shaping up prior to this announcement.

Key Factors Likely to Drive Results

CDW specializes in offering information technology products and services to business, government, education and healthcare customers, primarily in the United States and Canada. Growth in customer channels and continued strategic achievements are a couple of positive factors which are likely to drive performance in the to-be-reported quarter. Additionally, CDW’s robust product portfolio and product refreshes remain positives.

Furthermore, for the past few quarters, the company has been expanding its solutions suite and enhancing the services capabilities, which is likely to positively impact the quarterly results. Moreover, the company’s investment strategies to deliver integrated solutions both in and outside of the U.K., along with the international sales team and its international-branded website, will likely prove conducive to its performance.

Nonetheless, the company’s high debt burden might weigh on the bottom-line results. As of Sep 30, 2017, the company had total debt of approximately $3.39 billion. Such high-debt levels increase leverage risks and interest costs which may dent the company’s profitability.

CDW Corporation Price and EPS Surprise

What the Zacks Model Unveils?

Our proven model does not conclusively show that CDW is likely to beat earnings estimates this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or at least 3 (Hold) for this to happen. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

CDW currently carries a Zacks Rank #4 (Sell) and has an Earnings ESP of +0.15%. Notably, we caution against stocks with a Zacks Rank #4 or 5 (Sell rated) going into an earnings announcement, especially when the company is seeing negative estimate revisions.

The Zacks Consensus Estimate for the quarter under review is pegged at 98 cents, reflecting a year-over-year increase of approximately 14%. Additionally, analysts polled by Zacks project revenues of roughly $3.84 billion, up 10.1% from the year-ago quarter tally.

Some Stocks With Favorable Combination

Here are some companies which, as per our model, have the right combination of elements to post an earnings beat this quarter:

NVIDIA Corporation (NVDA - Free Report) has an Earnings ESP of +6.87% and a Zacks Rank of 2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Vishay Intertechnology, Inc. (VSH - Free Report) , with an Earnings ESP of +6.19% and a Zacks Rank of 2.

Akamai Technologies, Inc. (AKAM - Free Report) , with an Earnings ESP of +2.73% and a Zacks Rank #3.

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