CDW to Report Q3 Earnings: Here's What Investors Should Know

Core Viewpoint - CDW Corporation is expected to report third-quarter 2024 results on October 30, with revenue estimates of $5.73 billion, reflecting a 1.8$2.85, indicating a 4.8% improvement from the previous year [1] Group 1: Revenue and Earnings Estimates - The Zacks Consensus Estimate for CDW's revenues is $5.73 billion, which represents a 1.8$2.85 per share, unchanged over the past 60 days, indicating a 4.8% year-over-year improvement [1] - CDW's earnings have missed the Zacks Consensus Estimate in the last two quarters, matched in one, and surpassed in another, with an average negative surprise of 1.62% [1] Group 2: Factors Influencing Performance - Continued demand for cloud and security solutions is likely to drive top-line performance, with customer spending preferences focusing on cost optimization, data protection, and workforce productivity [2] - Revenues from Data Storage and Servers are expected to increase by 7.3% to $617.8 million in the upcoming quarter due to higher client spending on efficiency improvements [2] - The increasing adoption of AI-driven assistance and applications is anticipated to act as a tailwind for CDW [2] Group 3: Market Challenges - Challenging market conditions, including geopolitical risks and fluctuations in the UK market, present significant headwinds for CDW [3] - A volatile macroeconomic backdrop and complex technological shifts have led to muted customer spending behavior, with delays in decision-making due to the dynamic IT landscape and rising AI trends [3] - Revenues from the Government sales channel are expected to decline by 5.2$735.2 million due to the impact of congressional budget constraints [3] Group 4: Customer Base and Sector Performance - CDW's diverse customer base across business, government, education, and healthcare sectors in the U.S., U.K., and Canada is likely to provide some cushion amid macroeconomic volatility [3] - For the third quarter, revenues from Corporate and Small Business are expected to increase by 2.4% and 3.9%, respectively, while revenues from the Education sector are estimated to rise by 6.9%, and Healthcare is expected to decline by 4.4% year-over-year [3] Group 5: Earnings Prediction Model - The current model does not predict an earnings beat for CDW, as it has an Earnings ESP of 0.00% and a Zacks Rank of 3 (Hold) [4]