CDW Outpaces Expectations For Its Fourth Quarter

“CDW is undertaking an extensive sales force realignment to position its account managers along geographic territories. While we agree with the logic behind this initiative, transitioning accounts in a relationship-intensive business is likely to be disruptive to sales momentum,” said Brian Alexander, senior vice president of equity research at Raymond James.

The Vernon Hills, Ill.-based direct marketer earned $70.5 million, or 86 cents per share, on $1.61 billion in sales for the fourth quarter ended Dec. 31. The results compare with $62.7 million in net income, or 73 cents per diluted share, on $1.51 billion in revenue in the year-earlier quarter.

Analysts had projected earnings of 84 cents per share and $1.63 billion in sales for the quarter, according to Thomson Financial/First Call, but CDW&'s stock fell 6 percent to $55.86 a share the day after its financial report.

“It was a good year, but not a great year,” said John Edwardson, CEO of CDW. “Success means never being satisfied. We outpaced the market but can and need to do better.”

Meanwhile, PC Connection reported break-even earnings one week after it reduced earnings expectations from 7 cents per share, citing $1 million in special charges related to its Amherst Technologies acquisition.

The Merrimack, N.H.-based company earned $11,000, which amounted to break-even results per share, compared with $2.1 million, or 8 cents per share, in net income during the comparable prior-year quarter. Sales rose 17 percent to $398.6 million from $339.6 million for the same period one year earlier.

PC Connection Chairman and CEO Patricia Gallup said gross margins were lower than expected, and it was an “investment quarter for the company.” Tempe, Ariz.-based Insight Enterprises reported $11.1 million in quarterly net income, or 23 cents per share.

Analysts had expected earnings of 35 cents, according to Thomson Financial/First Call. For the year-ago quarter, Insight recorded net income of $31 million, or 62 cents per diluted share. Sales increased 3.4 percent to $832.9 million, compared with $805.7 million in the year-earlier quarter.