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In the last reported quarter, the company’s earnings beat the Zacks Consensus Estimate by 10.8%, but sales missed the same by 1.4%. On a year-over-year basis, earnings and sales increased 16.3% and 4.6%, respectively.
Watsco's earnings surpassed the consensus mark in two of the last four quarters and missed on other two occasions, the average surprise being 15.1%.
The Trend in Estimate Revision
The Zacks Consensus Estimate for the to-be-reported quarter’s earnings increased to $2.28 per share from $2.25 in the past seven days. The estimate figure indicates a 21.4% decline from the year-ago reported earnings of $2.90 per share. The consensus mark for revenues is pegged at $1.53 billion, suggesting 0.7% year-over-year growth.
Watsco’s top line is likely to have witnessed slight growth due to decent sales volume of residential HVAC equipment, effective price realization and sustained development of higher-efficiency systems.
The company’s technology deployment is likely to have helped it improve order fill rates with speed and accuracy. Watsco has been adjusting its business per customers’ needs, reducing costs in affected markets and improving efficiency. This is likely to have benefitted the company’s first-quarter performance.
Acquisitions have been vital parts of WSO’s strategy. It has been one of the preferred modes of solidifying the product portfolio, and leveraging business opportunities and revenues. Stronger sales mix of high-efficiency systems, improved margins and operating efficiencies are expected to have added positives.
However, the company’s services have been subject to seasonal changes. The company’s first and fourth quarters of each calendar year is disproportionately affected by seasonality due to the nature and the timing of HVAC systems replacement. Similarly, the demand for heating equipment is generally impacted in the second and third quarters. Price pressure on raw materials and supply-chain disruptions have been additional concerns.
What the Zacks Model Unveils
Our proven model predicts an earnings beat for Watsco this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Here are some companies in the Zacks Construction sector that, according to our model, have the right combination of elements to post an earnings beat in their respective quarters to be reported.
EMCOR Group (EME - Free Report) has an Earnings ESP of +0.27% and a Zacks Rank #2.
EME’s earnings missed the consensus mark once but beat the same on three other occasions, the average surprise being 5.5%. Earnings for the to-be-reported quarter are expected to increase 32.4% year over year.
Dycom Industries, Inc. (DY - Free Report) has an Earnings ESP of +4.09% and a Zacks Rank #3.
DY’s earnings topped the consensus mark in all the last four quarters, the average being 207.9%. Earnings for the to-be-reported quarter are expected to increase 31.4% year over year.
United Rentals, Inc. (URI - Free Report) has an Earnings ESP of +4.51% and a Zacks Rank #3.
URI’s earnings topped the consensus mark in all the last four quarters, the average being 6.9%. Earnings for the to-be-reported quarter are expected to grow 41.7% year over year.
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Watsco (WSO) to Post Q1 Earnings: Here's What to Expect
Watsco, Inc. (WSO - Free Report) is slated to release first-quarter 2023 results on Apr 20, before market open.
In the last reported quarter, the company’s earnings beat the Zacks Consensus Estimate by 10.8%, but sales missed the same by 1.4%. On a year-over-year basis, earnings and sales increased 16.3% and 4.6%, respectively.
Watsco's earnings surpassed the consensus mark in two of the last four quarters and missed on other two occasions, the average surprise being 15.1%.
The Trend in Estimate Revision
The Zacks Consensus Estimate for the to-be-reported quarter’s earnings increased to $2.28 per share from $2.25 in the past seven days. The estimate figure indicates a 21.4% decline from the year-ago reported earnings of $2.90 per share. The consensus mark for revenues is pegged at $1.53 billion, suggesting 0.7% year-over-year growth.
Watsco, Inc. Price and EPS Surprise
Watsco, Inc. price-eps-surprise | Watsco, Inc. Quote
Factors to Note
Watsco’s top line is likely to have witnessed slight growth due to decent sales volume of residential HVAC equipment, effective price realization and sustained development of higher-efficiency systems.
The company’s technology deployment is likely to have helped it improve order fill rates with speed and accuracy. Watsco has been adjusting its business per customers’ needs, reducing costs in affected markets and improving efficiency. This is likely to have benefitted the company’s first-quarter performance.
Acquisitions have been vital parts of WSO’s strategy. It has been one of the preferred modes of solidifying the product portfolio, and leveraging business opportunities and revenues. Stronger sales mix of high-efficiency systems, improved margins and operating efficiencies are expected to have added positives.
However, the company’s services have been subject to seasonal changes. The company’s first and fourth quarters of each calendar year is disproportionately affected by seasonality due to the nature and the timing of HVAC systems replacement. Similarly, the demand for heating equipment is generally impacted in the second and third quarters. Price pressure on raw materials and supply-chain disruptions have been additional concerns.
What the Zacks Model Unveils
Our proven model predicts an earnings beat for Watsco this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Watsco currently has a Zacks Rank #3 and an Earnings ESP of +4.12%. You can see the complete list of today’s Zacks #1 Rank stocks here.
Stocks With Favorable Combination
Here are some companies in the Zacks Construction sector that, according to our model, have the right combination of elements to post an earnings beat in their respective quarters to be reported.
EMCOR Group (EME - Free Report) has an Earnings ESP of +0.27% and a Zacks Rank #2.
EME’s earnings missed the consensus mark once but beat the same on three other occasions, the average surprise being 5.5%. Earnings for the to-be-reported quarter are expected to increase 32.4% year over year.
Dycom Industries, Inc. (DY - Free Report) has an Earnings ESP of +4.09% and a Zacks Rank #3.
DY’s earnings topped the consensus mark in all the last four quarters, the average being 207.9%. Earnings for the to-be-reported quarter are expected to increase 31.4% year over year.
United Rentals, Inc. (URI - Free Report) has an Earnings ESP of +4.51% and a Zacks Rank #3.
URI’s earnings topped the consensus mark in all the last four quarters, the average being 6.9%. Earnings for the to-be-reported quarter are expected to grow 41.7% year over year.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.