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Watsco, Inc. (WSO - Free Report) reported impressive fourth-quarter 2020 results, wherein earnings and revenues beat the Zacks Consensus Estimate.
Albert H. Nahmad, the company’s chairman and CEO, said, “We are excited to deliver another record year, especially given the unique business challenges faced in 2020. Our core U.S. residential business remained solid, generating 17% growth during the quarter and reflecting the continued trend towards higher-efficiency systems.”
Inside the Numbers
Watsco’s quarterly earnings of $1.14 per share topped the consensus estimate of $1.01 by 12.9% and increased 23.9% year over year.
Total revenues of $1,154.7 million surpassed the consensus mark of $1,134 million by 1.8% and increased 7.7% from the year-ago period. Sales were also up 7% on a same-store basis.
Sales of HVAC equipment (heating, ventilating and air conditioning; comprising 67% of sales) were up 9% year over year, including 13% sales growth in U.S. residential markets. Sales of other HVAC products (30% of sales) also increased 7% from the prior-year quarter. Sales from commercial refrigeration products (3% of sales) rose 2% year over year.
Gross margin expanded 10 basis points (bps) for the quarter. SG&A expenses increased 2% year over year, contracting 110 basis points as a percentage of sales, given operating efficiencies achieved throughout its network. Operating margin expanded 110 bps year over year to 6%.
Financial Operations
As of Dec 31, 2020, cash and cash equivalents were $146 million compared with $74.5 million at 2019-end. Cash from operations came in at $534.3 million for the 12 months of 2020 compared with $335.7 million a year ago.
Watsco has paid cash dividends for 47 consecutive years. Moreover, the board of directors has raised annual dividend by 10% to $7.80 per share, to be reflected from April 2021.
2020 Highlights
Net revenues in 2020 came in at $5,054.9 million compared with $4,770.3 million in 2019, showing a 2% increase on a same-store basis.
Operating profit increased to $401 million from $366.8 million in 2019, highlighting a 7% increase on a same-store basis.
SG&A in same store decreased 1% and improved 50 basis points, as a percentage of sales.
Earnings per share grew 8% year over year to $7.01.
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Watsco (WSO) Q4 Earnings & Revenues Beat Estimates, Rise Y/Y
Watsco, Inc. (WSO - Free Report) reported impressive fourth-quarter 2020 results, wherein earnings and revenues beat the Zacks Consensus Estimate.
Albert H. Nahmad, the company’s chairman and CEO, said, “We are excited to deliver another record year, especially given the unique business challenges faced in 2020. Our core U.S. residential business remained solid, generating 17% growth during the quarter and reflecting the continued trend towards higher-efficiency systems.”
Inside the Numbers
Watsco’s quarterly earnings of $1.14 per share topped the consensus estimate of $1.01 by 12.9% and increased 23.9% year over year.
Total revenues of $1,154.7 million surpassed the consensus mark of $1,134 million by 1.8% and increased 7.7% from the year-ago period. Sales were also up 7% on a same-store basis.
Sales of HVAC equipment (heating, ventilating and air conditioning; comprising 67% of sales) were up 9% year over year, including 13% sales growth in U.S. residential markets. Sales of other HVAC products (30% of sales) also increased 7% from the prior-year quarter. Sales from commercial refrigeration products (3% of sales) rose 2% year over year.
Watsco, Inc. Price, Consensus and EPS Surprise
Watsco, Inc. price-consensus-eps-surprise-chart | Watsco, Inc. Quote
Operating Highlights
Gross margin expanded 10 basis points (bps) for the quarter. SG&A expenses increased 2% year over year, contracting 110 basis points as a percentage of sales, given operating efficiencies achieved throughout its network. Operating margin expanded 110 bps year over year to 6%.
Financial Operations
As of Dec 31, 2020, cash and cash equivalents were $146 million compared with $74.5 million at 2019-end. Cash from operations came in at $534.3 million for the 12 months of 2020 compared with $335.7 million a year ago.
Watsco has paid cash dividends for 47 consecutive years. Moreover, the board of directors has raised annual dividend by 10% to $7.80 per share, to be reflected from April 2021.
2020 Highlights
Net revenues in 2020 came in at $5,054.9 million compared with $4,770.3 million in 2019, showing a 2% increase on a same-store basis.
Operating profit increased to $401 million from $366.8 million in 2019, highlighting a 7% increase on a same-store basis.
SG&A in same store decreased 1% and improved 50 basis points, as a percentage of sales.
Earnings per share grew 8% year over year to $7.01.
Zacks Rank
Watsco — which shares space with AAON, Inc. (AAON - Free Report) , Comfort Systems USA, Inc. (FIX - Free Report) and The AZEK Company Inc. (AZEK - Free Report) in the Zacks Building Products - Air Conditioner and Heating industry — currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Zacks Top 10 Stocks for 2021
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