CDW has reported a record third quarter as sales neared $5 billion.
For the quarter ending 30 September, the reseller giant saw revenue climb 12.2 percent, while net income rose 9.8 per cent to just over $200 million.
CDWchief executive officer Christine Leahy said: “We delivered excellent topline growth and profitability in the quarter while continuing to invest in the future and deliver shareholder value,” said These results reinforce the strength of our strategy and power of our business model – underpinned by balanced performance across our customer end markets, the breadth of our product and solutions portfolio and the ongoing execution of our strategy for growth.”
CDW chief financial officer Collin Kebo said: “Excellent operating results were amplified by share repurchases, delivering a 20 per cent increase in Non-GAAP net income per diluted share. Given this quarter’s results and our expectations for the balance of the year, we are now targeting 2019 constant currency Non-GAAP net income per diluted share growth in the mid-teens.”
“We expect to exceed our 2019 target to outpace US IT market growth by 200 to 300 basis points on a constant currency organic basis. To accomplish this, we will continue our laser focus on meeting the needs of our more than 250,000 customers in the United States, the United Kingdom and Canada and remaining the partner of choice for more than 1,000 leading and emerging technology brands as the technology market continues to evolve,” concluded Leahy.
Total Net sales in the third quarter of 2019 were $4,908 million, compared to $4,373 million in the third quarter of 2018, an increase of 12.2 percent. Net sales growth on an average daily sales basis was 10.5 percent and Net sales growth on a constant currency average daily sales basis was 10.9 percent. Currency impact to Net sales growth was driven by unfavourable translation of the British pound and Canadian dollar to US dollar. Third-quarter Net sales performance, on an average daily sales basis, included:
Total Corporate segment Net sales of $1,914 million, 10.4 percent higher than the third quarter of 2018. Total Small Business segment Net sales of $386 million, 11.8 per cent higher than the third quarter of 2018.
Net sales for CDW’s UK and Canadian operations, combined as “Other” for financial reporting purposes, of $507 million, 10.6 per cent higher than the third quarter of 2018. Results for 2019 include the Net sales of Scalar Decisions Inc. (“Scalar”), which was acquired on February 1, 2019.
Gross profit for the third quarter of 2019 was $816 million, compared to $714 million for the same period in 2018, representing an increase of 14.4 percent. The gross profit margin was 16.6 percent for the third quarter of 2019 versus 16.3 percent in the third quarter of 2018. The gross profit margin was positively impacted by an increase in the mix of netted down revenues, such as Software as a Service and warranties.
Operating income was $321 million in the third quarter of 2019, compared to $275 million in the third quarter of 2018, an increase of 16.7 percent. Non-GAAP operating income was $380 million in the third quarter of 2019, compared to $334 million in the third quarter of 2018, representing an increase of 13.9 pe cent. The Non-GAAP operating income margin was 7.8 percent for the third quarter of 2019 versus 7.6 percent in the third quarter of 2018.
Net income was $202 million in the third quarter of 2019, compared to $184 million in the third quarter of 2018, representing an increase of 9.8 per cent. Non-GAAP net income was $250 million in the third quarter of 2019, compared to $218 million in the third quarter of 2018, representing an increase of 14.8 percent.
