PC Connection Inc. experienced a 5.05% plummet in its stock price on Thursday, following the release of its fourth-quarter 2024 earnings report. The report revealed lackluster financial results that fell short of market expectations, with several key factors contributing to the stock's decline.
The company reported a 1.8% year-over-year increase in consolidated net sales for Q4 2024, reaching $708.9 million. However, gross profit remained flat at $129.8 million, while gross margins declined by 30 basis points to 18.3%, primarily due to a shift in product mix. Operating income decreased by 19% compared to Q4 2023, and net income dropped by 12.9% to $20.7 million.
According to the earnings call, PC Connection faced several challenges during the quarter and fiscal year 2024. The recovery in IT spending took longer than anticipated, leading to lower-than-expected overall IT spending. The company also experienced a 12% decrease in the sale of advanced technology products, which weighed on its financial performance. Additionally, the timing of customer investments in large advanced technology projects was delayed, further impacting revenue and profitability.
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