CDWC: CDW Growth Now Solid
Our earnings preview for CDW Corp (CDWC) said “14.6% sales growth doable given Berbee acquisition.” They did it and then some.
CDW Reports First Quarter Results: Financial News:
Total sales in the first quarter of 2007 were $1.859 billion compared to $1.589 billion in the first quarter of 2006, an increase of 17.0 percent. Average daily sales in the first quarter of 2007 were $29.049 million compared to $24.822 million in the first quarter of 2006, representing a 17.0 percent increase. There were 64 billing days in both the first quarter of 2007 and the first quarter of 2006.CDW completed the acquisition of Berbee Information Networks on October 11, 2006. Total sales for the first quarter of 2006 do not include Berbee sales, while the first quarter of 2007 sales include Berbee sales. Excluding Berbee sales in the first quarter of 2007, and therefore on a non-GAAP basis, total sales were $1.716 billion, an increase of 8.0 percent compared to total sales of $1.589 billion for the first quarter of 2006 and average daily sales for the first quarter of 2007 were $26.819 million, an increase of 8.0 percent compared to average daily sales for the first quarter of 2006 of $24.822 million.
Net income was $76.8 million in the first quarter of 2007 compared to $61.7 million in the first quarter of 2006, an increase of 24.5 percent. Diluted earnings per share were $0.96 in the first quarter of 2007 compared to diluted earnings per share of $0.75 in the first quarter of 2006.
Consensus estimates called for $0.85 on $1.82 billion in sales. And while the 8% organic growth rate in sales was below both consensus 5-year growth forecasts of 11.7% and the “double-digit” growth investors seem to assume is the norm for tech companies, it is certainly an improvement from recent quarters and is now sufficient to be called “solid.”
Looking at the balance sheet, about the only thing to complain about was a slight increase in the allowance for doubtful accounts, which occurred despite a slight reduction in accounts receivable. It suggests that a customer or two may not be paying the bills, but is nothing we would worry much about unless the trend continues as so far it isn’t a very large change and probably reflects normal variation.
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[…] When CDW Corp. (CDWC) announced earnings for the first quarter, we described the results as solid. The 8.0% growth was above average for the computer-related industries though below the “double-digit” growth investors typically (and quite arbitrarily) expect from tech-related firms. CDW’s Average Daily Sales Increase 22.8 Percent in April 2007: Financial News - Yahoo! Finance CDW Corporation (NASDAQ:CDWC - News), a leading provider of technology products and services to business, government and education, today announced average daily sales for April 2007 were $29.571 million, an increase of 22.8 percent compared to average daily sales of $24.088 million for April 2006. Total sales for April 2007 were $621.0 million, an increase of 28.9 percent compared to total sales of $481.8 million for April 2006. There were 21 billing days in April 2007 and 20 billing days in April 2006. Even excluding the acquisition, CDW posted those double-digit sales gains. CDW is a major reseller of Hewlett Packard (HPQ - Annual Report) computers, but Hewlett’s recent blowout was attributed to Asia. CDW only sells in the US, where businesses have been parsimonious with regard to equipment and software spending. It looks like CDW could be gaining a good deal of market share. For more information, see all articles on: Stock Market, HPQ, CDWC This article is for entertainment purposes only and reflects the author’s opinion. It is not a solicitation or advice to buy or sell any securities mentioned. Always consult a qualified advisor before making investment decisions. […]
[…] When CDW Corp. (CDWC) announced earnings for the first quarter, I described the results as solid. The 8.0% growth was above average for the computer-related industries though below the “double-digit” growth investors typically (and quite arbitrarily) expect from tech-related firms. Then, they achieved that double-digit growth rate in the second quarter, though there were some questions about the quality of the sales. Still, investors have been pleased by the results, and given CDW’s size and position in the channel I’m not surprised that there are talks to take the company private. […]