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CDW's Q1 Earnings & Revenues Beat Estimates, Increase Y/Y

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CDW Corporation (CDW - Free Report) reported first-quarter 2022 non-GAAP earnings of  $2.20 per share, beating the Zacks Consensus Estimate by 10% and increasing 26.6% year over year.

The company’s revenues increased 23% year over year to $5.95 billion. Quarterly revenues also surpassed the consensus mark by 5.2%. On a constant currency basis, net sales improved by 23.3%.

In the past year, shares have declined 2.3% compared with industry’s decline of 26.3%.

Quarterly Details

Net sales of CDW’s Corporate segment amounted to $2.628 billion, rising 45.5% on a year-over-year basis.

 

The Small Business segment’s net sales of $524 million rose 21.1% year over year.

Coming to the Public segment, net sales amounted to $2.033 billion. The figure rose 5.8% from the year-earlier quarter’s levels. Revenues from Healthcare and Government customers were up 26.8% and 5.4%, respectively. Revenues from Education customers dropped 4.3%.

Net sales in Other (Canadian and U.K. operations) increased 12.8% to $765 million.

CDW’s gross profit of $1.104 million rallied 38.8% on a year-over-year basis. However, the gross margin expanded 220 basis points (bps) to 18.6%, mainly on a favorable product mix and rate.

The non-GAAP operating income increased 25.7% year over year to $462 million. Additionally, the non-GAAP operating margin advanced 20 bps to 7.8%.

Selling and administrative expenses rose 52% year over year to $717.2 million, primarily due to higher sales payroll expenses, increased coworker count and higher acquisition and integration costs.

Balance Sheet and Cash Flow

As of Mar 31, 2022, CDW had $386.9 million of cash and cash equivalents compared with $258.1 million as of Dec 31, 2021.

The company has a long-term debt of $6.51 billion, lower than $6.76 billion as of Dec 31, 2021.

CDW generated $380.8 million of cash flow from operating activities compared with $344.6 billion in the prior-year quarter.

Separately, the company announced that its board of directors authorized a quarterly cash dividend of 50 cents per share to be payable on Jun 10 to shareholders of record as of May 25.

Zacks Rank & Other Stocks to Consider

CDW currently carries a Zacks Rank #2 (Buy).

Some better-ranked stocks from the broader technology sector are Flex (FLEX - Free Report) , Jabil (JBL - Free Report) and Broadcom (AVGO - Free Report) . Flex and Jabil sport a Zacks Rank #1 (Strong Buy), while Broadcom carries a Zacks Rank of 2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for Flex’s fiscal 2022 earnings is pegged at $1.88 per share, unchanged in the past 60 days. The long-term earnings growth rate is pegged at 14.9%.

Flex earnings beat the Zacks Consensus Estimate all last four quarters, with the average being 25.6%. Shares of FLEX have declined 2.3% in the past year.

The Zacks Consensus Estimate for Jabil fiscal 2022 earnings is pegged at $7.25 per share, up 10.2% in the past 60 days. The long-term earnings growth rate is 12%.

Jabil earnings beat the Zacks Consensus Estimate all last four quarters, with the average being 13.5%. Shares of JBL have gained 12.5% in the past year.

The Zacks Consensus Estimate for Broadcom’s fiscal 2022 earnings is pegged at $35.67 per share, up 1.1% in the past 60 days. AVGO’s long-term earnings growth rate is pegged at 15.6%.

Broadcom’s earnings beat the Zacks Consensus Estimate in all the preceding four quarters, with the average being 1.9%. Shares of AVGO have increased 31% in the past year.


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Jabil, Inc. (JBL) - free report >>

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Broadcom Inc. (AVGO) - free report >>

CDW Corporation (CDW) - free report >>