IT solutions provider PC Connection's' gross profit rises, partly helped by data center modernization
PC Connection reported a 2.2% decline in Q3 net sales year-over-year, while gross profit rose by 2.4%. Net income fell 8.6%, with diluted EPS at $0.97. The company repurchased 83,693 shares for $5.1 million. The Business Solutions segment saw a 1.7% sales increase, while the Public Sector Solutions segment experienced a 24.3% decline. Growth in gross profit is attributed to data center modernization and digital workplace transformation. Analysts rate the stock as a 'hold' with a 12-month price target of $76.00, reflecting a potential 17.8% increase from its recent closing price.
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Overview
- PC Connection Q3 net sales fall 2.2% y/y, gross profit rises 2.4%
- Net income for Q3 down 8.6% y/y, diluted EPS falls to $0.97
- Company repurchased 83,693 shares for $5.1 mln in Q3
Outlook
- Company did not provide specific guidance for future quarters or full year in its press release
Result Drivers
- BUSINESS SOLUTIONS GROWTH - Net sales for Business Solutions segment increased by 1.7% to $256.8 mln, with gross profit up 7.8%
- PUBLIC SECTOR DECLINE - Public Sector Solutions segment sales fell 24.3% to $132.5 mln, with a 12.4% drop in gross profit
- STRATEGIC INITIATIVES - Co attributes gross profit growth to data center modernization, digital workplace transformation, and supply chain innovation
Key Details
Metric Beat/Mis Actual Consensu
s s
Estimate
Q3 EPS $0.97
Q3 Net $83.73
Income mln
Analyst Coverage
- The one available analyst rating on the shares is “hold”
- The average consensus recommendation for the integrated hardware & software peer group is “buy.”
- Wall Street’s median 12-month price target for PC Connection Inc is $76.00, about 17.8% above its October 28 closing price of $62.45
- The stock recently traded at 16 times the next 12-month earnings vs. a P/E of 18 three months ago
Press Release: For questions concerning the data in this report, contact Estimates.Support@lseg.com. For any other questions or feedback, contact . (This story was created using Reuters automation and AI based on LSEG and company data. It was checked and edited by a Reuters journalist prior to publication.)
