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CDW's Q1 Earnings & Revenues Surpass Estimates, Down Y/Y
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CDW Corporation (CDW - Free Report) reported first-quarter 2023 non-GAAP earnings of $2.03 per share, beating the Zacks Consensus Estimate of $2.01. However, it fell year over year by 7.9%.
The company’s revenues decreased 14.2% year over year to $5.103 billion. Net sales decreased 14.7% at constant currency. The downtick was caused due to weakness across all business segments. Also, weakening IT spending owing to rising economic uncertainty was a major concern. However, quarterly revenues beat the consensus mark by 0.03%
Separately, the company announced a quarterly dividend, which will be payable on Jun 13, to shareholders of record as of May 25.
Net sales of CDW’s Corporate segment amounted to $2.204 billion, declining 17.4% on a year-over-year basis.
The Small Business segment’s net sales of $411 million declined 22.7% year over year.
The Public segment’s net sales amounted to $1.813 billion, down 12.2% from the year-earlier quarter. Revenues from Education customers dropped 27.4%. Revenues from Healthcare and Government customers were unchanged from the previous year’s quarter.
Net sales in Other (Canadian and U.K. operations) declined 13.1% to $675 million.
CDW’s gross profit of $1.089 million decreased 1.3% on a year-over-year basis. The gross margin expanded 270 basis points (bps) to 21.3%, mainly due to a favorable product mix and rate.
The non-GAAP operating income decreased 6% year over year to $434 million. Additionally, the non-GAAP operating margin advanced 70 bps to 8.5%.
Selling and administrative expenses rose 2.4% year over year to $734 million, primarily due to higher sales payroll expenses, increased coworker count and other expenses due to transformation initiatives.
Balance Sheet and Cash Flow
As of Mar 31, 2023, CDW had $279.4 million of cash and cash equivalents compared with $315.2 million as of Dec 31, 2022.
The company has a long-term debt of $5.75 billion, lower than $5.87 billion as of Dec 31, 2022.
For the year that ended on Mar 31, 2023, CDW generated $365.4 million of cash flow from operating activities compared with $380.8 million in the comparable period in the prior fiscal.
The Zacks Consensus Estimate for Arista Networks’ 2023 earnings has increased 1.2% in the past 60 days to $5.83 per share. The long-term earnings growth rate is anticipated to be 14.2%.
Arista Networks’ earnings beat the Zacks Consensus Estimate in the last four quarters, the average being 14.2%. Shares of ANET have increased 29% in the past year.
The Zacks Consensus Estimate for Badger Meter’s 2023 earnings has increased 4.7% in the past 60 days to $2.69 per share.
Badger Meter’s earnings beat the Zacks Consensus Estimate in all the last four quarters, the average being 5.3%. Shares of BMI have increased 122.4% in the past year.
The Zacks Consensus Estimate for Enfusion’s 2023 earnings has increased 5.6% in the past 60 days to 19 cents per share.
Enfusion’s earnings beat the Zacks Consensus Estimate in the last four quarters, the average surprise being 6.7%. Shares of the company have increased 3.2% in the past year.
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CDW's Q1 Earnings & Revenues Surpass Estimates, Down Y/Y
CDW Corporation (CDW - Free Report) reported first-quarter 2023 non-GAAP earnings of $2.03 per share, beating the Zacks Consensus Estimate of $2.01. However, it fell year over year by 7.9%.
The company’s revenues decreased 14.2% year over year to $5.103 billion. Net sales decreased 14.7% at constant currency. The downtick was caused due to weakness across all business segments. Also, weakening IT spending owing to rising economic uncertainty was a major concern. However, quarterly revenues beat the consensus mark by 0.03%
Separately, the company announced a quarterly dividend, which will be payable on Jun 13, to shareholders of record as of May 25.
CDW Corporation Price, Consensus and EPS Surprise
CDW Corporation price-consensus-eps-surprise-chart | CDW Corporation Quote
Quarterly Details
Net sales of CDW’s Corporate segment amounted to $2.204 billion, declining 17.4% on a year-over-year basis.
The Small Business segment’s net sales of $411 million declined 22.7% year over year.
The Public segment’s net sales amounted to $1.813 billion, down 12.2% from the year-earlier quarter. Revenues from Education customers dropped 27.4%. Revenues from Healthcare and Government customers were unchanged from the previous year’s quarter.
Net sales in Other (Canadian and U.K. operations) declined 13.1% to $675 million.
CDW’s gross profit of $1.089 million decreased 1.3% on a year-over-year basis. The gross margin expanded 270 basis points (bps) to 21.3%, mainly due to a favorable product mix and rate.
The non-GAAP operating income decreased 6% year over year to $434 million. Additionally, the non-GAAP operating margin advanced 70 bps to 8.5%.
Selling and administrative expenses rose 2.4% year over year to $734 million, primarily due to higher sales payroll expenses, increased coworker count and other expenses due to transformation initiatives.
Balance Sheet and Cash Flow
As of Mar 31, 2023, CDW had $279.4 million of cash and cash equivalents compared with $315.2 million as of Dec 31, 2022.
The company has a long-term debt of $5.75 billion, lower than $5.87 billion as of Dec 31, 2022.
For the year that ended on Mar 31, 2023, CDW generated $365.4 million of cash flow from operating activities compared with $380.8 million in the comparable period in the prior fiscal.
Zacks Rank & Stocks to Consider
CDW currently carries a Zacks Rank #4 (Sell).
Some better-ranked stocks in the broader technology space are Arista Networks (ANET - Free Report) , Badger Meter (BMI - Free Report) and Enfusion (ENFN - Free Report) . Badger Meter and Enfusion currently sport a Zacks Rank #1 (Strong Buy), whereas Arista Networks carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Arista Networks’ 2023 earnings has increased 1.2% in the past 60 days to $5.83 per share. The long-term earnings growth rate is anticipated to be 14.2%.
Arista Networks’ earnings beat the Zacks Consensus Estimate in the last four quarters, the average being 14.2%. Shares of ANET have increased 29% in the past year.
The Zacks Consensus Estimate for Badger Meter’s 2023 earnings has increased 4.7% in the past 60 days to $2.69 per share.
Badger Meter’s earnings beat the Zacks Consensus Estimate in all the last four quarters, the average being 5.3%. Shares of BMI have increased 122.4% in the past year.
The Zacks Consensus Estimate for Enfusion’s 2023 earnings has increased 5.6% in the past 60 days to 19 cents per share.
Enfusion’s earnings beat the Zacks Consensus Estimate in the last four quarters, the average surprise being 6.7%. Shares of the company have increased 3.2% in the past year.