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What You Need to Know Ahead of CDW's Q1 Earnings Release

CDW Corporation CDW is slated to report first-quarter 2023 results on May 3.

The Zacks Consensus Estimate for revenues is pegged at $5.1 billion, suggesting a decline of 14.2% from the year-ago quarter’s reported figure. The consensus estimate for earnings is pegged at $2.01 per share, indicating a decrease of 8.6% from $2.20 recorded in the year-ago quarter.

CDW’s earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 4.7%.

CDW Corporation Price and EPS Surprise

CDW Corporation Price and EPS Surprise
CDW Corporation Price and EPS Surprise

CDW Corporation price-eps-surprise | CDW Corporation Quote

Factors to Note

Recently, CDW released its selected preliminary financial results for the first quarter that ended Mar 31, and updated its outlook for the U.S. IT industry.

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CDW saw a decline in its first-quarter performance due to economic uncertainty, which caused customers to prioritize mission-critical initiatives and spend more cautiously. The contraction in demand was most prominent with the company's largest commercial customers and across transactional products, where solutions were relatively resilient but still came below the management’s expectations.

CDW noted that first-quarter net sales were nearly $5.1 billion. Gross margin was aided by a stronger mix of high-value products and services. However, the impact of more conservative purchases by customers weighed on the first quarter's non-GAAP operating income margin, which came in at the low end of the company’s full-year range. CDW aims to align its fixed cost base with the anticipated demand in response to the above-mentioned factors.

CDW reported strong first-quarter cash flow performance due to disciplined working capital management. This provided strategic flexibility, which helped the company to return $280 million of cash to shareholders via dividends and share repurchases.

CDW now expects the U.S. IT market to decline by a high-single-digit rate in 2023 compared with the previous guidance of remaining flat due to the first-quarter market performance and near-term unfavorable conditions. Despite headwinds in the IT space, CDW is targeting net sales outperformance of 200 to 300 basis points in constant currency.

What Our Model Says

Our proven model does not conclusively predict an earnings beat for CDW this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat.

CDW has an Earnings ESP of 0.00% and a Zacks Rank #4 (Sell). You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Stocks With Favorable Combination

Here are a few stocks that you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat this quarter.

Marriott International MAR has an Earnings ESP of +0.81% and currently carries a Zacks Rank of 2. MAR is set to announce quarterly figures on May 2. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for MAR’s to-be-reported quarter’s earnings and revenues is pegged at $1.86 per share and $5.28 billion, respectively. Shares of MAR have declined 4.9% in the past year.

Booking Holdings BKNG has an Earnings ESP of +14.56% and presently carries a Zacks Rank #2. BKNG is slated to release quarterly numbers on May 4.

The Zacks Consensus Estimate for BKNG’s to-be-reported quarter’s earnings and revenues is pegged at $10.62 per share and $3.74 billion, respectively. Shares of BKNG have gained 22.5% in the past year.

Post Holdings POST has an Earnings ESP of +2.94% and currently sports a Zacks Rank #1. POST is scheduled to report quarterly earnings on May 4.

The Zacks Consensus Estimate for POST’s to-be-reported quarter’s earnings and revenues is pegged at 68 cents per share and $1.56 billion, respectively. Shares of POST have increased 23.7% in the past year.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

Marriott International, Inc. (MAR) : Free Stock Analysis Report

Post Holdings, Inc. (POST) : Free Stock Analysis Report

CDW Corporation (CDW) : Free Stock Analysis Report

Booking Holdings Inc. (BKNG) : Free Stock Analysis Report

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