CDW Corporation (CDW - Free Report) reported better-than-expected results for second-quarter 2020.
The company’s second-quarter non-GAAP earnings per share of $1.56 surpassed the Zacks Consensus Estimate of $1.35. The reported figure, however, declined 2.6% year over year mainly on lower revenues.
The company’s quarterly revenues of $4.37 billion outpaced the consensus mark of $4.32 billion. However, the top-line figure fell 5.7% year over year on a reported basis and decreased 5.3% on constant currency. Weakness in corporate demand due to the pandemic-induced economic and business disruptions, along with unfavorable currency-exchange rates, mainly hurt CDW’s sales during the reported quarter.
Quarter in Detail
Net sales of CDW’s Corporate segment, amounting to $1.56 billion, registered a 17.3% decline on a year-over-year basis.
The Small Business segment’s net sales of $302 million dropped 19.9% year over year.
Coming to the Public segment, net sales of $2.02 billion climbed 9.9% from the year-earlier quarter. Moreover, revenues from Government and Education customers were up 24.4% and 13.3%, respectively. However, sales to Healthcare customers slid 12.8%.
Net sales in Other (Canadian and UK operations) were down 8.4% to $484 million.
CDW’s gross profit of $747 million dipped 3.4% on a year-over-year basis. Yet, gross margin expanded 40 basis points (bps) to 17.1% on solid product margin and lower cost of goods sold.
Non-GAAP operating income fell 5.6% year over year to $338 million. However, non-GAAP operating margin remained flat at 7.7%.
Effective tax rate for the June-end quarter was 22.9%, lower than the year-ago quarter’s 24.7%.
Balance Sheet and Cash Flow
CDW exited the April-June quarter with cash and cash equivalents of $958 million compared with the $214 million witnessed at the end of the previous quarter.
The company has a long-term debt of $4.13 billion compared with the prior quarter’s $3.56 billion.
CDW generated $515.8 million of cash flow from operational activities in the first-half of 2020.
Zacks Rank and Key Picks
Currently, CDW carries a Zacks Rank #4 (Sell).
Some better-ranked stocks in the broader technology sector include Benefitfocus , Cogent Communications Holdings (CCOI - Free Report) and Synaptics (SYNA - Free Report) , all carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The long-term earnings growth rate for Benefitfocus, Cogent and Synaptics is currently pegged at 30%, 10.6%, and 10%, respectively.
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CDW Corporation (CDW - Free Report) reported better-than-expected results for second-quarter 2020.
The company’s second-quarter non-GAAP earnings per share of $1.56 surpassed the Zacks Consensus Estimate of $1.35. The reported figure, however, declined 2.6% year over year mainly on lower revenues.
The company’s quarterly revenues of $4.37 billion outpaced the consensus mark of $4.32 billion. However, the top-line figure fell 5.7% year over year on a reported basis and decreased 5.3% on constant currency. Weakness in corporate demand due to the pandemic-induced economic and business disruptions, along with unfavorable currency-exchange rates, mainly hurt CDW’s sales during the reported quarter.
Quarter in Detail
Net sales of CDW’s Corporate segment, amounting to $1.56 billion, registered a 17.3% decline on a year-over-year basis.
The Small Business segment’s net sales of $302 million dropped 19.9% year over year.
Coming to the Public segment, net sales of $2.02 billion climbed 9.9% from the year-earlier quarter. Moreover, revenues from Government and Education customers were up 24.4% and 13.3%, respectively. However, sales to Healthcare customers slid 12.8%.
Net sales in Other (Canadian and UK operations) were down 8.4% to $484 million.
CDW’s gross profit of $747 million dipped 3.4% on a year-over-year basis. Yet, gross margin expanded 40 basis points (bps) to 17.1% on solid product margin and lower cost of goods sold.
Non-GAAP operating income fell 5.6% year over year to $338 million. However, non-GAAP operating margin remained flat at 7.7%.
Effective tax rate for the June-end quarter was 22.9%, lower than the year-ago quarter’s 24.7%.
Balance Sheet and Cash Flow
CDW exited the April-June quarter with cash and cash equivalents of $958 million compared with the $214 million witnessed at the end of the previous quarter.
The company has a long-term debt of $4.13 billion compared with the prior quarter’s $3.56 billion.
CDW generated $515.8 million of cash flow from operational activities in the first-half of 2020.
Zacks Rank and Key Picks
Currently, CDW carries a Zacks Rank #4 (Sell).
Some better-ranked stocks in the broader technology sector include Benefitfocus , Cogent Communications Holdings (CCOI - Free Report) and Synaptics (SYNA - Free Report) , all carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The long-term earnings growth rate for Benefitfocus, Cogent and Synaptics is currently pegged at 30%, 10.6%, and 10%, respectively.
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2021.
Click here for the 6 trades >>
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
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