RealTime IT News

CDW Lowers Guidance

Tech retailer CDW Computer Centers Wednesday warned investors that first quarter sales will likely fall short of previous guidance, though it also noted that gross profit margins remain strong.

While CDW chairman and CEO John A. Edwardson acknowledged that sales would probably come in under expectations, he pointed out that the company still expects record sales and earnings per diluted share for the quarter, with EPS coming in at the lower range of its previous forecast.

"Projected earnings per diluted share are consistent with our earlier guidance of 48 cents to 50 cents, however, not at the higher end of that range," he said. "Gross profit margins remain strong, although we expect sales to be below our earlier guidance. We've experienced a sales increase of approximately 2 percent for the first quarter through March 11, compared with that time period last year."

According to a survey by Thomson First Call, analysts are looking for first quarter EPS of 49 cents a share. In the year ago quarter, CDW posted EPS of 46 cents a share.

CDW said it saw flat sales in the corporate sector for the quarter, as compared with the year-ago quarter, while public sector sales scaled up by 12 percent. However, the company noted that the growth rate of its public sector sales has slowed compared with recent quarters. It cited a year-over-year decline in sales to federal government agencies as the main culprit behind the decline, saying those agencies were affected by the delayed passage of the 2003 Federal Civilian Agency Budgets, which were finally signed in February.