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CDW to Report Q2 Earnings: What's in Store for the Stock?

Zacks Equity Research

CDW Corporation CDW is slated to release second-quarter 2019 results on Jul 31.

The company’s earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, the average being 8.91%.

In the first quarter, the company’s non-GAAP earnings rose 18.2% year over year to $1.24 and also surpassed the Zacks Consensus Estimate of $1.10.

Additionally, revenues of $3.96 billion marked a year-over-year rise of 9.7% and topped the Zacks Consensus Estimate of $3.77 billion as well. Moreover, the top line was up 12.4% in constant currency (cc).

The Zacks Consensus Estimate for second-quarter revenues is currently pegged at $4.49 billion, indicating 7.24% growth from the year-ago reported figure. Further, the consensus mark for earnings has been stable at $1.51 over the past 60 days.

Factors to Impact Q2 Results

CDW’s second-quarter results are likely to be driven by the company’s balanced portfolio of customer end-markets and the breadth of its product and solutions pipeline.

The company is also expected to benefit from strong growth in the international markets this June quarter.

Moreover, the recent acquisition of Scalar, which performed in line with the company’s expectations in the last reported quarter, is expected to be accretive in the second quarter as well.

However, earlier-than-expected federal deal closings in the March quarter might decelerate revenue growth in the June quarter, which make us apprehensive about the stock’s prospects.

This apart, adverse foreign currency fluctuations and macroeconomic perils persist as a key threat. Also, the highly competitive environment is a major concern this earnings season.

CDW Corporation Price and EPS Surprise

CDW Corporation Price and EPS Surprise

CDW Corporation price-eps-surprise | CDW Corporation Quote

What Our Model Says

The proven Zacks model clearly shows that a company with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) has maximum chances of beating estimates if it also has a positive Earnings ESP. Zacks Rank #4 (Sell) or 5 (Strong Sell) stocks are best avoided. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

CDW currently carries a Zacks Rank of 5 and an Earnings ESP of 0.00%, which make surprise prediction unlikely for the stock this reporting cycle.

Stocks to Consider

Here are some stocks worth considering as our model shows that these have the right combination of elements to beat on earnings in their upcoming releases:

Ciena Corporation CIEN has an Earnings ESP of +5.26% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here .

CGI Group, Inc. GIB has an Earnings ESP of +1.27% and a Zacks Rank of 2.

GTT Communications, Inc. GTT has an Earnings ESP of +144.44% and a Zacks Rank #3.

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