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Will End Market & Portfolio Strength Drive CDW Q2 Earnings?

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CDW Corporation (CDW - Free Report) is scheduled to report second-quarter results on Aug 2.

In the last reported quarter, the company came up with a positive earnings surprise of 14.1%.  Notably, the company beat the Zacks Consensus Estimate in three of the trailing four quarters and matched it once, delivering an average positive surprise of 4.02%.
Moreover, revenues of $3.6 billion increased 10.8% from the year-ago quarter and surpassed the Zacks Consensus Estimate of $3.5 billion in the first quarter.

The Zacks Consensus Estimate for the quarter under review is pegged at $1.30, indicating a year-over-year increase of approximately 26.2%. Revenues are expected to be $4.14 billion, up 3.8% from the year-ago quarter figure.

Let’s see how things are shaping up for the upcoming announcement.

Factors to Consider

CDW specializes in offering information technology products and services to business, government, education and healthcare customers, primarily in the United States and Canada.

The company has been witnessing growth across all U.S. channels and international operations. Notably, the company’s customer end-markets and expanding product and technology portfolio are key drivers.

Also, CDW’s ongoing investment in a three-part strategy to deliver solutions and services per customer requirement is helping it record growth.

However, the company’s high debt burden is an overhang on the bottom line. High-debt levels increase leverage risks and interest costs, which might dent the company’s profits.

What Our Model Says
According to the Zacks model, a company with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) has a good chance of beating estimates if it also has a positive Earnings ESP. Zacks Rank #4 (Sell) or #5 (Strong Sell) stocks are best avoided. 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 #2 and has an Earnings ESP of +0.15%.

Other Stocks to Consider

Here are some stocks that you may also consider as our model shows that these have the right combination of elements to post an earnings beat in their upcoming releases:

Turtle Beach (HEAR - Free Report) with an Earnings ESP of +57.14%, and a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

NetApp (NTAP - Free Report) with an Earnings ESP of +1.12% and a Zacks Rank #2.

Avnet (AVT - Free Report) with an Earnings ESP of +1.37% and a Zacks Rank #2.

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