CDW Corporation (NASDAQ:CDW) shares are trading lower after the company reported worse-than-expected second-quarter FY24 financial results.
Net sales declined 3.6% Y/Y to $5.423 billion, marginally missing the consensus of $5.425 billion.
The company said that economic uncertainty and a complex technology environment have led customers to adopt a more cautious approach to technology spending, resulting in decreased net sales.
Net sales from the Corporate segment declined 2.2% Y/Y to $2.195 billion, and the Small Business segment decreased 3.4% Y/Y to $383 million.
Total Public segment net sales fell 2.3% Y/Y to $2.24 billion due to a decline in net sales to Government and Education customers of 6.2% and 0.9% Y/Y, respectively.
Net sales for CDW's U.K. and Canadian operations, combined as "Other" for financial reporting purposes, fell 12.7% Y/Y to $602 million.
Average daily sales fell 3.6% Y/Y to $84.7 million. Gross margin increased to 21.8% from 21.0% a year ago, driven by a higher share of netted-down revenue, primarily from software as a service.
The adjusted operating margin was 9.4% flat Y/Y in the quarter. Adjusted EPS of $2.50 missed the consensus of $2.53.
CDW held $665.3 million in cash and equivalents as of June-end.
Dividend: CDW declared a quarterly cash dividend per share of $0.62, payable on September 10 to all stockholders of record as of August 26.
Albert J. Miralles, chief financial officer, said, "Customers continue to turn to CDW to address their mission-critical IT and operational needs across the full IT solutions stack and lifecycle. We remain well-positioned to attain our target of exceeding US IT market growth by 200 to 300 basis points on a constant currency basis."
"To achieve this, we remain laser focused on meeting the needs of our more than 250,000 customers around the globe and remaining the partner of choice for more than 1,000 leading and emerging technology brands as the IT market continues to evolve."
CDW stock gained over 17% in the last 12 months. Investors can gain exposure to the stock via SMI 3Fourteen Full-Cycle Trend ETF (NASDAQ:FCTE) and WBI BullBear Quality 3000 ETF (NYSE:WBIL).
Price Action: CDW shares are down 5.73% at $219.15 at the last check Wednesday.
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.