PC Connection Earnings, Sales Slip In 1Q

For the quarter ended March 31, the Merrimack, N.H.-based company posted a profit $948,000, or 4 cents per share, down from $1.2 million, or 5 cents per share, a year ago. Thomson Financial/First Call had projected earnings of 5 cents per share for PC Connection's 2005 first quarter.

Sales fell 1 percent year over year to $323.9 million in the 2005 first quarter. Wall Street had forecast $324.6 million in revenue.

PC Connection Chairman and CEO Patricia Gallup attributed the decreases to softness in the small- and midsize-business market and the public sector.

"Strong year-over-year sales growth in our large-account segment was offset by softness in demand in our SMB and public-sector segments," Gallup said in a statement. "Looking forward, we are making our systems and sales tools more flexible and responsive, allowing us to be more productive as well as enhancing the buying experience for our customers."

PC Connection also plans to roll out a ServiceConnection program, which includes repair, installation, help-desk support, remote backup and other IT services, according to Gallup. "[It] can reduce the total cost of ownership for our SMB customers and gives us a new platform for growth," she said in a statement.

Commercial sales increased 1.1 percent to $276.7 million, and SMB sales fell 3.4 percent to $200.3 million. Large-account business increased 15 percent to $76.4 million. Public-sector sales fell 12.4 percent to $47.2 million.

Notebooks and PDAs accounted for 18.8 percent of sales, down from 21 percent in the year-ago quarter. Desktops and servers represented 14.8 percent of the company's sales in the quarter, compared with 14.1 percent last year. Shares of PC Connection were trading at $6.30 Thursday morning, up 61 cents.