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CDW Corporation (CDW - Free Report) reported third-quarter 2023 non-GAAP earnings per share (EPS) of $2.72, beating the Zacks Consensus Estimate of $2.59. Also, the bottom line rose 4.4% year over year.
The company’s revenues decreased 9.4% year over year to $5.628 billion. Net sales decreased 9.9% at constant currency. The downtick was caused due to weakness across Corporate and Small Business segments. Also, quarterly revenues failed to beat the consensus mark of $5.824 billion.
Separately, the company announced a quarterly dividend, which will be paid on Dec 12, 2023, to shareholders of record as of Nov 24.
Net sales of CDW’s Corporate segment amounted to $2.227 billion, declining 12.3% on a year-over-year basis.
The Small Business segment’s net sales of $378 million declined 21.7% year over year.
The Public segment’s net sales amounted to $2.422 billion, up 1.5% from the year-ago quarter. Revenues from Education customers rose 2.1%. Revenues from Healthcare increased 2.4%, while revenues from Government customers were flat.
Net sales in Other (Canadian and U.K. operations) declined 15.4% to $601 million.
CDW’s gross profit of $1.228 billion decreased 0.4% on a year-over-year basis. The gross margin expanded 200 basis points (bps) to 21.8% due to a higher product margin.
The non-GAAP operating income increased 1.3% year over year to $556 million. Additionally, the non-GAAP operating margin advanced 110 bps to 9.9%.
Selling and administrative expenses declined 2.3% year over year to $749 million, primarily due to reduced discretionary expenses.
Balance Sheet and Cash Flow
As of Sep 30, 2023, CDW had $440.7 million of cash and cash equivalents compared with $203.9 million as of Jun 30.
The company has a long-term debt of $5.66 billion, lower than $5.72 billion as of Jun 30, 2023.
For the nine months that ended Sep 30, 2023, CDW generated $1,062.2 million of cash flow from operating activities compared with $1,094 million in the year-ago period.
The Zacks Consensus Estimate for Asure Software’s 2023 EPS has increased 5.9% in the past 60 days to 54 cents.
Asure Software’s earnings beat the Zacks Consensus Estimate in all the last four quarters, the average being 676.4%. Shares of ASUR have surged 51% in the past year.
The Zacks Consensus Estimate for Synopsys’ 2023 EPS has gained 2.5% in the past 60 days to $11.09. SNPS’ long-term earnings growth rate is 16.4%. Shares of SNPS have surged 67.5% in the past year.
The Zacks Consensus Estimate for Wix’s 2023 EPS has remained unchanged in the past 60 days to $3.35.
Wix’s earnings beat estimates in all the trailing four quarters, delivering an average surprise of 319.3%. Shares of WIX have rallied 3.2% in the past year.
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CDW's Q3 Earnings Surpass Estimates, Revenues Decrease Y/Y
CDW Corporation (CDW - Free Report) reported third-quarter 2023 non-GAAP earnings per share (EPS) of $2.72, beating the Zacks Consensus Estimate of $2.59. Also, the bottom line rose 4.4% year over year.
The company’s revenues decreased 9.4% year over year to $5.628 billion. Net sales decreased 9.9% at constant currency. The downtick was caused due to weakness across Corporate and Small Business segments. Also, quarterly revenues failed to beat the consensus mark of $5.824 billion.
Separately, the company announced a quarterly dividend, which will be paid on Dec 12, 2023, to shareholders of record as of Nov 24.
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 $2.227 billion, declining 12.3% on a year-over-year basis.
The Small Business segment’s net sales of $378 million declined 21.7% year over year.
The Public segment’s net sales amounted to $2.422 billion, up 1.5% from the year-ago quarter. Revenues from Education customers rose 2.1%. Revenues from Healthcare increased 2.4%, while revenues from Government customers were flat.
Net sales in Other (Canadian and U.K. operations) declined 15.4% to $601 million.
CDW’s gross profit of $1.228 billion decreased 0.4% on a year-over-year basis. The gross margin expanded 200 basis points (bps) to 21.8% due to a higher product margin.
The non-GAAP operating income increased 1.3% year over year to $556 million. Additionally, the non-GAAP operating margin advanced 110 bps to 9.9%.
Selling and administrative expenses declined 2.3% year over year to $749 million, primarily due to reduced discretionary expenses.
Balance Sheet and Cash Flow
As of Sep 30, 2023, CDW had $440.7 million of cash and cash equivalents compared with $203.9 million as of Jun 30.
The company has a long-term debt of $5.66 billion, lower than $5.72 billion as of Jun 30, 2023.
For the nine months that ended Sep 30, 2023, CDW generated $1,062.2 million of cash flow from operating activities compared with $1,094 million in the year-ago period.
Zacks Rank & Stocks to Consider
CDW currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the broader technology space are Asure Software (ASUR - Free Report) , Synopsys (SNPS - Free Report) and Wix.com (WIX - Free Report) . Asure Software and Wix.com presently sport a Zacks Rank #1 (Strong Buy), whereas Synopsys 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 Asure Software’s 2023 EPS has increased 5.9% in the past 60 days to 54 cents.
Asure Software’s earnings beat the Zacks Consensus Estimate in all the last four quarters, the average being 676.4%. Shares of ASUR have surged 51% in the past year.
The Zacks Consensus Estimate for Synopsys’ 2023 EPS has gained 2.5% in the past 60 days to $11.09. SNPS’ long-term earnings growth rate is 16.4%. Shares of SNPS have surged 67.5% in the past year.
The Zacks Consensus Estimate for Wix’s 2023 EPS has remained unchanged in the past 60 days to $3.35.
Wix’s earnings beat estimates in all the trailing four quarters, delivering an average surprise of 319.3%. Shares of WIX have rallied 3.2% in the past year.