CDW Posts Q3 Profit, Hikes Dividend; To Buy Back $500 Mln Of Shares

(RTTNews) - CDW Corp. (CDW) reported that its net income was $55.6 million or $0.32 per share in the third quarter of 2014 compared to a net loss of $2.2 million or $0.01 per share in the third quarter of 2013.

Non-GAAP net income, which excludes intangible asset amortization expense related to purchased intangibles, certain debt refinancing expenses and certain other costs was $110.7 million in the third quarter of 2014, compared to $85.2 million in the third quarter of 2013, representing an increase of 29.9 percent driven by stronger operating results and lower interest expense. Non-GAAP net income per share for the quarter was $0.64 compared to $0.50 last year.

Total net sales in the third quarter of 2014 were $3.266 billion, compared to $2.864 billion in the third quarter of 2013, an increase of 14.0 percent. Average daily sales in the third quarter of 2014 were $51.0 million, compared to $44.8 million in the third quarter of 2013. There were 64 selling days in both the third quarters of 2014 and 2013.

Analysts polled by Thomson Reuters expected the company to report earnings of $0.62 per share and revenues of $3.11 billion. Analysts' estimates typically exclude special items.

The company also announced the approval by its Board of Directors of a 59 percent increase in its quarterly cash dividend and authorization of a new $500 million share repurchase program, as well as its entry into a definitive agreement to acquire a minority stake in UK-based IT solutions provider, Kelway.

A quarterly cash dividend payment of $0.0675 per share will be made on December 10 to shareholders of record as of the close of business on November 25, 2014.

CDW noted that its 35 percent investment in Kelway will enhance the company's ability to provide IT solutions to US-based multi-national customers. Based in the UK, Kelway is an integrated IT solutions provider with global supply chain relationships which enable it to conduct business in more than 100 countries. The investment will be accounted for as an equity method investment and is expected to be accretive beginning in the first year. Terms of the transaction were not disclosed.