Why Electronic Equipment Company CDW Shares Are Up Today

CDW Corp CDW shares are trading higher after the company reported fourth-quarter FY23 results.

Net sales declined 7.7% Y/Y to $5.02 billion, missing the consensus of $5.32 billion. Net sales from the Total Corporate segment declined 8.0% Y/Y to $2.29 billion, and the Total Small Business segment decreased 12.7% Y/Y to $370 million.

Total Public segment net sales fell 4.1% Y/Y to $1.78 billion due to a decline in net sales to Education and Healthcare customers by 11.7% Y/Y.

Net sales for CDW’s U.K. and Canadian operations, combined as “Other” for financial reporting purposes, fell 13.6% Y/Y to $587 million.

Average daily sales fell 7.7% Y/Y to $79.7 million. Gross margin expanded to 23.0% from 21.7% a year ago, aided by a more favorable contribution of netted-down revenue, primarily software as a service.

The non-GAAP operating margin was around 10.3% vs. 9.6% a year ago. Non-GAAP EPS of $2.57 beat the consensus of $2.56. 

CDW held $588.7 million in cash and equivalents as of December 31, 2023.

Dividend: CDW declared a quarterly cash dividend per share of $0.62, up 5% Y/Y, payable on March 12, 2024, to stockholders of record as of February 26, 2024.

Repurchase: The Board of Directors authorized a $750 million increase to the company’s share repurchase program. The company had around $338 million remaining from the previous repurchase program as of December 31, 2023.

“Looking ahead to 2024, we remain well-positioned to continue our track record of outpacing the US IT market growth by 200 to 300 basis points on a constant currency basis. 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,” said Christine A. Leahy, chair and chief executive officer.

Price Action: CDW shares are up 4.48% at $240.82 on the last check Wednesday.