CDW Logs Record 1Q Earnings, Eyes Global Expansion

The Vernon Hills, Ill.-based direct marketer had earnings of $61.4 million, or 72 cents per share, for the quarter ended March 31, compared with $55.3 million, or 63 cents per share, a year earlier. Sales for the first quarter of 2005 climbed to $1.5 billion from $1.3 billion a year earlier.

CDW Chairman and CEO John Edwardson said in a conference call with financial analysts that he saw no softening in the quarter, particularly in March. IBM said in its earnings call last week that it had difficulty closing transactions at the end of its quarter ended March 31. But Edwardson characterized business as stable. During March, CDW's average daily sales were $23.6 million, compared with $21.4 million in March 2004.

Edwardson said CDW saw double-digit growth across all of its product categories in the first quarter. Notebooks, desktops, servers, software, storage and video unit sales rose by more than 20 percent, he said.

In addition, CDW is exploring international expansion, Edwardson said. "We've taken a look at Europe, we've taken a look at Asia, and there are opportunities in Central and South America," he said. "But nothing is on the horizon."

Direct Web sales during the first quarter jumped 21 percent to $436 million and now comprise 30 percent of CDW's total sales. "I continue to be amazed at how much business is converting [to Web sales]," Edwardson said. "It's a huge productivity boost for us."

Edwardson added that CDW is on schedule to open its new 513,000-square-foot Las Vegas configuration and distribution center by the end of the year.

In early trading Tuesday, CDW shares were up $2.09, or 3.8 percent, to $56.70.