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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.