CDW beats Q4 revenue estimates on strong IT solutions demand

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(Reuters) – CDW on Wednesday beat Wall Street estimates for the fourth quarter, helped by growing demand for its IT solutions, as small- and medium-sized businesses continue to spend on the company’s services.

Shares of the Vernon Hills, Illinois-based company rose 2.3% in premarket trading.

The company is also benefiting from the growing contribution from its cloud and end-point services, as clients are now opting for more of cloud-based solutions.

CDW provides IT solutions such as cloud and cybersecurity, and hardware products to enterprises, government and healthcare customers in the United States, UK and Canada.

Even though economic uncertainty continues to persist, certain end-markets experienced improvement in customer spending during the quarter, the company said.

CDW reported net sales of $5.19 billion in the quarter ended Dec. 31, beating analysts’ estimates of $4.93 billion, as per data compiled by LSEG.

The corporate segment – CDW’s largest contributor to revenue – rose 4.2% to $2.35 billion from a year earlier, and also beat estimates of $2.23 billion.

On an adjusted basis, it earned $2.48 per share, compared estimates of $2.32 per share.

Its gross profit margin for the quarter was 22.3%, compared with 23% last year.

The IT services provider announced a $750-million increase to its share repurchase authorization and a quarterly cash dividend of $0.625 per share, 1% higher than the previous year.

(Reporting by Kritika Lamba in Bengaluru; Editing by Shailesh Kuber)