CDW's Q4 Earnings In line With Estimates, Revenues Down Y/Y
CDW Corporation CDW reported fourth-quarter 2023 non-GAAP earnings per share (EPS) of $2.57, which matched the Zacks Consensus Estimate. Also, the bottom line rose 2.8% year over year.
The company’s revenues decreased 7.7% year over year to $5.018 billion. Net sales decreased 8.1% at constant currency. The downtick was caused due to weakness across all business segments. Also, quarterly revenues failed to beat the consensus mark of $5.359 billion.
Separately, the company announced a quarterly dividend of 62 cents, which will be paid on Mar 12, 2024, to shareholders of record as of Feb 26, 2024. Also, the company’s board of directors has authorized a $750 million increase to the share repurchase program.
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 $2.286 billion, declining 8% on a year-over-year basis.
The Small Business segment’s net sales of $370 million declined 12.7% year over year.
The Public segment’s net sales amounted to $1.776 billion, down 4.1% from the year-ago quarter. Revenues from Education customers declined 11.7%.
Revenues from Healthcare decreased 4.7%, while revenues from Government increased 4.5%.
Net sales in Other (Canadian and U.K. operations) declined 13.6% to $587 million.
CDW’s gross profit of $1.554 billion decreased 2.3% on a year-over-year basis. The gross margin expanded 130 basis points (bps) to 23% due to the favorable contribution of netted-down revenues, primarily software as a service.
The non-GAAP operating income decreased 0.8% year over year to $518.7 million. Additionally, the non-GAAP operating margin advanced 70 bps to 10.3%.
Selling and administrative expenses decreased 2.1% year over year to $719 million, primarily due to reduced discretionary expenses.
Balance Sheet and Cash Flow
As of Dec 31, 2023, CDW had $588.7 million of cash and cash equivalents compared with $440.7 million as of Sep 30, 2023.
The company has a long-term debt of $5.03 billion, lower than $5.66 billion as of Sep 30, 2023.
For the year ended Dec 31, 2023, CDW generated $1,598.7 million of cash flow from operating activities compared with $1,335 million in the year-ago period.
Zacks Rank & Stocks to Consider
CDW currently carries a Zacks Rank #4 (Sell).
Some better-ranked stocks worth considering in the broader technology space are Itron ITRI, Woodward WWD and Watts Water Technologies WTS. Woodward and Itron sport a Zacks Rank #1 (Strong Buy), while Watts Water Technologies 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 Itron’s 2023 EPS has remained unchanged in the past 60 days to $2.88. ITRI’s long-term earnings growth rate is 23%.
Itron’s earnings surpassed the Zacks Consensus Estimate in each of the last four quarters, the average surprise being 289.3%. Shares of ITRI have gained 33.1% in the past year.
The Zacks Consensus Estimate for Woodward’s 2024 EPS has inched up 5.7% in the past 60 days to $5.20. WWD’s long-term earnings growth rate is 15.5%.
Woodward’s earnings beat the Zacks Consensus in each of the last four quarters, the average surprise being 27.2%. Shares of WWD have gained 31% in the past year.
The Zacks Consensus Estimate for Watts Water Technologies 2023 EPS has improved 0.1% in the past 60 days to $8.09. WTS’s long-term earnings growth rate is 7.8%.
WTS’ earnings surpassed the Zacks Consensus Estimate in each of the last four quarters, the average surprise being 11.8%. Shares of WTS have soared 23.2% in the past year.
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