Notable Moving Stock: PC Connection, Inc.’s (NASDAQ: CNXN)

On 11 Dec 18, shares of PC Connection, Inc.’s (NASDAQ: CNXN) plunged/surged 0.56% in trading session and finally closed at $30.26. The company most recent volume stood at 54,857 shares as compared to average volume of 92,974 shares. Over the one year trading period, the stock has a high price of $43.05 and its low price is recorded at $22.66. The company has a market cap of $808.853M.

Connection PC Connection, Inc. (CNXN) recently reported results for the third quarter ended September 30, 2018. Net income for the third quarter ended September 30, 2018 raised by 4.9% to $13.8M, or $0.51 per diluted share, contrast to net income of $13.1M, or $0.49 per diluted share for the previous year third quarter.

Net sales as presented for the quarter ended September 30, 2018 were $658.5M. Net sales previous to the impact of the new revenue recognition standard for the quarter ended September 30, 2018 raised by 5.1% to $766.3M, contrast to $729.2M for the previous year third quarter.

Gross profit as presented for the quarter ended September 30, 2018 was $100.4M. Gross profit previous to the impact of the new revenue recognition standard for the quarter ended September 30, 2018 was $100.7M, contrast to $96.1M in the previous year third quarter, an raise of 4.7%.

Gross margin as presented for the quarter ended September 30, 2018 was 15.3%. Gross margin previous to the impact of the new revenue recognition standard was 13.1%, contrast to 13.2% for the previous year third quarter.

Operating income as presented for the quarter ended September 30, 2018 was $19.0M. Operating income previous to the impact of the new revenue recognition standard was $19.2M, contrast to $21.7M in the previous year third quarter, a decrease of 11.8%.

Net income as presented for the quarter ended September 30, 2018 was $13.8M. Net income previous to the impact of the new revenue recognition standard was $13.9M, contrast to $13.1M in the previous year third quarter, an raise of 6.2%.

Earnings per share (“EPS”) on a diluted basis as presented for the quarter ended September 30, 2018 was $0.51. EPS previous to the impact of the new revenue recognition standard was $0.52 per share, contrast to $0.49 on a diluted basis in the previous year third quarter.

Net income, totaled $64.0M for the twelve months ended September 30, 2018, contrast to $47.1M for the twelve months ended September 30, 2017. Earnings before interest, taxes, depreciation and amortization, adjusted for stock-based compensation expense, acquisition and restructuring costs (“Adjusted EBITDA”), a non-GAAP measure, totaled $99.1M for the twelve months ended September 30, 2018. Adjusted EBITDA previous to the impact of the new revenue recognition standard was $99.9M, contrast to $92.4M for the twelve months ended September 30, 2017.

Net sales as presented for the nine months ended September 30, 2018 were $1,990.0M. Net sales previous to the impact of the new revenue recognition standard for the nine months ended September 30, 2018 raised by 6.4% to $2,286.6M, contrast to $2,149.6M for the nine months ended September 30, 2017.

Quarterly Performance by Section:

  • Net sales for the Business Solutions section, as presented, for the third quarter of 2018 were $244.9M. Net sales previous to the impact of the new revenue recognition standard for the third quarter of 2018 raised by 1.3% to $294.2M, contrast to $290.6M for the previous year’s quarter. Net/com products experienced solid growth during the quarter at 14%. Gross margin raised by 327 basis points to 18.2% primarily Because of the adoption of the new revenue recognition standard and the raise in invoice selling margins. Gross margin previous to the impact of the new revenue recognition standard for the third quarter of 2018 was 15.3%.
  • Net sales for the Enterprise Solutions section, as presented, for the third quarter of 2018 were $265.5M. Net sales previous to the impact of the new revenue recognition standard for the third quarter of 2018 raised by 13.3% to $303.6M, contrast to $268.0M for the previous year’s quarter. Mobility, desktops and net/com products experienced strong growth in this section with an raise of 26%, 16%, and 13%, respectively. Gross margin raised by 156 basis points to 14.3% primarily Because of the adoption of the new revenue recognition standard. Gross margin previous to the impact of the new revenue recognition standard for the third quarter of 2018 was 12.5%.
  • Net sales for the Public Sector Solutions section, as presented, for the third quarter of 2018 were $148.2M. Net sales previous to the impact of the new revenue recognition standard for the third quarter of 2018 reduced by 1.2% to $168.5M, contrast to $170.6M for the previous year’s quarter. Mobility and net/com products experienced strong revenue growth in this section with an raise of 27% and 8%, respectively. Gross margin raised by 118 basis points to 12.1% primarily Because of the adoption of the new revenue recognition standard. Gross margin previous to the impact of the new revenue recognition standard for the third quarter of 2018 was 10.6%.

Quarterly Sales by Product Mix:

  • Notebook/mobility sales, the Company’s largest product category, as presented, raised by 9% year over year and accounted for 28% of net sales in the third quarter of 2018, contrast to 23% of net sales in the previous year quarter. Not Including the impact of the adoption of the new revenue recognition standard, notebook/mobility sales raised by 10% year over year and accounted for 24% of net sales in the third quarter of 2018, contrast to 23% in the previous year quarter. The Enterprise Solutions and Public Sector sections experienced strong year-over-year growth in notebook sales.
  • Software sales, as presented, reduced by 58% year over year and accounted for 11% of net sales in the third quarter of 2018, contrast to 24% of net sales in the previous year quarter. The decrease in software sales was Because of the adoption of the new revenue recognition standard. Not Including the impact of the adoption of the new revenue recognition standard, software sales raised by 2% year over year and accounted for 23% of net sales in the third quarter of 2018, contrast to 24% of net sales in the previous year quarter. We experienced solid growth in cloud-based offerings, security, and office productivity.
  • Net/Com products, as presented, raised by 12% year over year and accounted for 9% of net sales in the third quarter of 2018, contrast to 7% of net sales in the previous year quarter. Not Including the impact of the adoption of the new revenue recognition standard, net/com product sales raised by 13% year over year and accounted for 8% of net sales in the third quarter of 2018, contrast to 7% in the previous year quarter. All three selling sections experienced strong year-over-year growth in net/com sales.

EPS growth for this year is -2.80% and EPS growth for next year is expected to reach at 8.20%. EPS growth in past five years was 7.10% while EPS growth in next five years is projected to arrive at 9.00%. Sales growth past 5 years was measured at 6.20%.

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