PC Connection Beats Wall Street's Profit Forecast Despite Public Sector, Desktop Sales Declines

PC Connection managed to beat Wall Street's profit forecast for its fiscal second quarter despite weakness in its public sector and desktop PC businesses.

The $2.5 billion solution provider behemoth, No. 24 on the CRN SP500, reported revenue of $627.6 million during the quarter, down one percent year-over-year.

PC Connection, Merrimack, N.H., posted net income of $11.6 million or 44 cents per diluted share, up two percent year-over-year.

[Related: Rising Notebook, Public Sector Sales Boost PC Connection's 4Q Results]

Wall Street analysts were expecting revenue of $639.1 million and profit of 43 cents per share, according to a Zacks Investment Research analyst survey.

Tim McGrath, president and CEO of PC Connection, said the quarterly sales decline was consistent with market trends for desktop PC sales and similar items.

PC Connection shares closed Thursday trading up 26 cents at $22.23.

PC Connection said SMB segment sales, which dropped three percent in the quarter to $259.3 million, were hit hard by a double digit percentage decline in desktop PC sales.

PC Connection's public sector sales declined 4.5 percent to $136.5 million. Sales to state and local government and educational institutions were down six percent in the quarter compared to the year ago period.

McGrath said this quarter "was the company's toughest compare" with the strong numbers PC Connection had last year. "Frankly, we have turned that corner," he said on the call.

He said PC Connection expects sales growth in 2016 to be similar to this year due to the "industry wide decline" in desktop PC sales.