CDW Corporation CDW reported fourth-quarter 2024 non-GAAP earnings per share (EPS) of $2.48, beating the Zacks Consensus Estimate of $2.33. However, the bottom line contracted 3.5% year over year.

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The company’s revenues grew 3.3% year over year to $5.186 billion. The results reflected a mixed demand environment, with some end-markets stabilizing while others, such as government and education, showing weakness. Robust momentum across its Corporate, Small Business, Public, and International (UK & Canada) business segments backed the top-line growth. Quarterly revenues surpassed the consensus mark of $4.97 billion.

For 2024, net sales fell 1.8% year over year to $21 million, owing to slower demand across all segments resulting from cautious technology spending behavior by customers. However, its healthcare vertical showcased strength with 7.1% year-over-year growth. 

CDW Corporation Price, Consensus and EPS Surprise

CDW Corporation price-consensus-eps-surprise-chart | CDW Corporation Quote

Separately, the company announced a quarterly dividend of 62.5 cents, which will be paid on March 11, 2025, to shareholders on record as of Feb. 25. Also, the company’s board of directors authorized a $750 million increase to the share repurchase program.

In response to the results, CDW’s shares went up 11.5% in pre-market trading on Feb. 05. In the past year, shares have declined 13.6% against the Zacks Computers-IT Services industry’s growth of 9.6%.

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Segmental Details

Net sales of CDW’s Corporate segment amounted to $2.345 billion, increasing 2.6% on a year-over-year basis.

The Small Business segment’s net sales of $380 million rose 2.7% year over year.

The Public segment’s revenues totaled $1.854 billion, representing 4.4% growth from the year-ago quarter. The uptick was driven by a 27.5% surge in net sales to Healthcare customers amid a 7.1% decline in Government and a 3.7% fall in Education customers.

Net sales in Other (Canadian and U.K. operations) rose 3.4% to $607 million.

Margin Details

CDW’s gross profit of $1.155 billion inched up 0.1% on a year-over-year basis. Gross profit margin decreased slightly from 23% to 22.3% due to a higher mix of notebook and desktop sales and a reduced pricing rate across multiple product categories.

Non-GAAP operating income declined 3.8% year over year to $499 million. The non-GAAP operating margin was down to 9.6% from 10.3%.

Selling and administrative expenses increased 3.9% year over year to $747 million. The increase was mainly driven by lower performance-based compensation adjustments, higher workplace optimization costs and credit loss provisions, with some offset from lower payroll expenses.

Balance Sheet and Cash Flow

As of Dec. 31, 2024, CDW had $503.5 million of cash and cash equivalents compared with $946.7 million as of Sept. 30, 2024.

The company had a long-term debt of $5.607 billion, compared with $5.608 billion as of Sept. 30, 2024.

For the year ended Dec. 31, 2024, CDW generated $1.277 billion of cash flow from operating activities compared with $1.6 million in the year-ago period.

CDW’s Zacks Rank

CDW currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Recent Performance of Other Companies

Western Digital Corporation WDC reported second-quarter fiscal 2025 non-GAAP earnings of $1.77 per share, surpassing the Zacks Consensus Estimate of $1.75. The company incurred a loss of 75 cents per share in the prior-year quarter. 

Shares of WDC have gained 9% in the past year.

Plexus Corp PLXS reported first-quarter fiscal 2025 adjusted EPS of $1.73, up 40.7% year over year. The figure outpaced the Zacks Consensus Estimate of $1.59 per share.

In the past year, shares of PLXS have surged 50%.

Seagate Technology Holdings plc STX reported second-quarter fiscal 2025 non-GAAP earnings of $2.03 per share, beating the Zacks Consensus Estimate by 7.98%. The company reported non-GAAP earnings of 12 cents per share in the year-ago quarter.

In the past year, STX shares have gained 10.6%.

 

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