CDW stock drops on weaker-than-expected revenue as business spending tightens

CDW Corp.
CDW,
+0.73%
shares dropped in the extended session Tuesday after the IT software provider forecast revenue below the Wall Street consensus because of tight business spending. CDW shares fell 9% after hours, following a 0.7% rise to close the regular session at $190.29. “The first quarter was marked by a period of intensifying economic uncertainty that led our customers to spend more cautiously and prioritize mission critical initiatives,” said Christine Leahy, CDW chair and chief executive, said in a statement. “This demand contraction resulted in first-quarter performance below our expectations,” Leahy said. “Volume declines were most acute with our largest commercial customers and across transactional products.” The company said it expects the U.S. IT market to contract by a high single-digit rate in 2023, and first-quarter revenue of about $5.1 billion. Analysts surveyed by FactSet, however, were looking for $5.58 billion. Weakness in business spending doesn’t bode well for International Business Machines Corp.
IBM,
-0.03%,
which now derives three-quarters of its revenue from services, and reports its earnings after the bell Wednesday.