Yahoo Finance CDW Reports Q1 Preliminary Results and Updates US IT Outlook
CDW Corporation CDW has released its selected preliminary financial results for the first quarter that ended Mar 31, 2023, and updated its outlook for the U.S. IT industry. The company is slated to report first-quarter results on May 3.
The company saw a decline in its first-quarter performance due to economic uncertainty, which caused customers to prioritize mission-critical initiatives and spend more cautiously. The contraction in demand was most prominent with the company's largest commercial customers and across transactional products, while solutions were relatively resilient but still came below the company’s expectations.
Following the announcement, shares are down 10.6% in the pre-market trading on Apr 19, 2023.
CDW Corporation Price and Consensus
CDW Corporation price-consensus-chart | CDW Corporation Quote
CDW's first-quarter net sales were $5.1 billion. The first-quarter gross margin was aided by a stronger mix of high-value products and services. However, the impact of more conservative purchases by customers weighed on the first quarter's non-GAAP operating income margin, which came in at the low end of the company’s full-year range. CDW aims to align its fixed cost base with the anticipated demand in response to the above-mentioned factors.
The company also reported strong first-quarter cash flow performance due to disciplined working capital management. This provided strategic flexibility, which helped the company to return $280 million of cash to shareholders via dividends and share repurchases.
The company now expects the U.S. IT market to decline by a high-single-digit rate in 2023 compared with the previous guidance of remaining flat due to the first-quarter market performance and near-term unfavorable conditions. Despite headwinds in the IT space, CDW is targeting net sales outperformance of 200 to 300 basis points in constant currency.
CDW expects 2023 non-GAAP earnings per share on a diluted basis to be “modestly” below 2022.
CDW offers discrete hardware and software products to integrated IT solutions businesses, such as mobility, security, data center optimization, cloud computing, virtualization and collaboration.
CDW currently holds a Zacks Rank #4 (Sell). Shares of the company have gained 6.3% against the sub-industry’s decline of 10.7% in the past year.
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