PC Connection: Recovery At Least One Quarter Away

Direct marketer misses expectations by 1 cent per share

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PC Connection expects demand to be soft in the first quarter, although the rate of decline in the commercial market has slowed, the company said.

The Merrimack-based direct marketer earned $1.4 million, 6 cents per share, in the fourth quarter ended Dec. 31, compared to $5.5 million, or 22 cents per share, for the year-ago quarter. First Call had predicted earnings of 7 cents per share.

Earlier this week, competitor CDW Computer Centers also said an economic rebound is unlikely in the first half of the year.

PC Connection's revenue in the quarter was $273.1 million, down from $345.1 million for the same period last year.

"Federal government sales were again a highlight of the quarter, while weak demand from business and consumer markets led to disappointing results in the fourth quarter," said Ken Koppel, CEO of PC Connection. "We continue to invest in upgrading our fundamental sales, marketing and Internet capabilities, while reducing operating costs wherever possible.'

For the year, PC Connection reported $1.18 billion in sales, compared to $1.45 billion last year. Net income was $7.2 million, or 29 cents per share, compared to $31.5 million, or $1.23 per share, in 2000.

Notebook computers accounted for 20.5 percent of sales, compared to 22.3 percent last year. Desktops and servers comprised 11.8 percent of sales, compared to 14.1 percent for the year-ago quarter. Average selling prices fell 17 percent compared to the year-ago period.

PC Connection shares closed at $15.13 Wednesday, up 45 cents per share.


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