CDW Corp.'s Sales Appear Better Than Peers', But Aren't

After Dell reported a decline and Hewlett Packard, Ingram Micro and Tech Data all showed mid-single-digit gains, one might wonder whether CDW was taking market share after seeing this headline:

CDW’s Average Daily Sales Increase 14.2 Percent in February 2007

CDW Corporation (CDWC), a leading provider of technology products and services to business, government and education, today announced average daily sales for February 2007 were $28.018 million, an increase of 14.2 percent compared to average daily sales of $24.533 million for February 2006. Total sales for February 2007 were $560.4 million, an increase of 14.2 percent compared to total sales of $490.7 million for February 2006. There were 20 billing days in both February 2007 and February 2006.

But not so fast.

As previously announced, CDW completed the acquisition of Berbee Information Networks Corporation on October 11, 2006. February 2006 sales do not include Berbee sales, while February 2007 sales include Berbee sales. Excluding Berbee sales in February 2007, and therefore on a non-GAAP basis, CDW’s average daily sales for February 2007 were $26.080 million compared to average daily sales for February 2006 of $24.533 million and total sales for February 2007 were $521.6 million compared to total sales of $490.7 million for February 2006, both representing an increase of 6.3 percent.

Ah. Mid-single digit growth. Just what we’ve come to expect. Unfortunately our expectations don’t seem to be lining up with those of the market. The consensus growth rate is 14% for the next five years.

CDWC 1-yr chart: