The negative drumbeat continues
Computer distributor CDW (CDWC) announced February monthly sales growth of just 6.8%. Although it only needs to match that rate in March to meet its revenue estimates for the quarter, the pace marks a slowdown from the 10% pace prevalent through the third quarter of 2005 and is below the 8% needed over the full year in order to meet annual revenue estimates. As an indicator for overall industry sales, it confirms the pace established yesterday by Tech Data.
Interestingly, the aggregate estimated sales growth for all of the companies in the S&P 1500 Information Technology sector is 7.1%, down from 7.8% in the December quarter and well below the 17.3% growth recorded in March 2004, which was the peak growth rate of the recent up-cycle.
Bucking the negative trend in tech was Intuit, which raised its third quarter (its fiscal year ends in June) guidance. However, the maker of TurboTax experiences a high degree of volatility during tax season so this should not be considered an important data point for the remainder of technology.
Ticker Sense has put out an Advance/Decline line for economic data, showing the net number of reports that come in above/below expectations. It doesn’t look pretty right now.
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