Information technology products reseller and services provider CDW on Wednesday edged above Wall Street's target for earnings in the fourth quarter but its sales were light. Still, CDW stock rose on the news.
The Lincolnshire, Ill.-based company earned an adjusted $2.50 a share on sales of $5.44 billion in the December quarter. Analysts polled by FactSet had expected CDW earnings of $2.48 a share on sales of $6.19 billion. On a year-over-year basis, CDW earnings rose 20% while sales slipped 2%.
CDW provides multibrand information technology solutions to business, government, education and health-care customers in the U.S., U.K. and Canada.
U.S. corporate sales rose 6.9% to $2.48 billion in the fourth quarter, but public sector sales dropped 8.7% to $1.85 billion. A 30.9% decline in education sales drove the drop in public sector sales, as government and health-care sales rose 13.5% and 8.1%, respectively.
Also, small business sales fell 13.1% to $424 million and sales in the U.K. and Canada sank 2.7% to $680 million.
CDW Stock Rises After Report
On the stock market today, CDW stock climbed 1.2% to close at 201.66. On Tuesday, CDW stock dipped 0.4% to 199.29.
"In 2023, we are well-positioned to continue our track record of outpacing the U.S. IT market growth by 200 to 300 basis points on a constant currency basis," Chief Executive Christine Leahy said in a news release.
She added, "To accomplish this, we will maintain our laser focus on meeting the needs of our more than 250,000 customers and remaining the partner of choice for more than 1,000 leading and emerging technology brands as the technology market continues to evolve."
In addition, CDW announced a $750 million increase to its share repurchase authorization.
Evercore ISI analyst Amit Daryanani reiterated his outperform rating on CDW stock. He also raised his price target to 220 from 210.
"Importantly, CDW provided a prudently conservative guide calling for revenue growth of about 2-3% in 2023 and EPS growth of 'upper end of mid-single digit'," he said in a note to clients. CDW forecast market share gains as the IT industry faces flat spending this year, he said.
CDW Stock Is On IBD Tech Leaders List
CDW stock ranks third out of 58 stocks in IBD's Computer-Tech Services industry group, according to IBD Stock Checkup. It has an IBD Composite Rating of 92 out of 99.
IBD's Composite Rating is a blend of key fundamental and technical metrics to help investors gauge a stock's strengths. The best growth stocks have a Composite Rating of 90 or better.
Also, CDW stock is on the IBD Tech Leaders list.
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