We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Watsco's (WSO) Q1 Earnings Meet Estimates, Revenues Miss
Read MoreHide Full Article
Watsco, Inc. (WSO - Free Report) reported first-quarter 2019 results, wherein earnings met the Zacks Consensus Estimate, while revenues missed the same.
The company reported quarterly earnings of 88 cents per share, in line with the consensus estimate. However, total revenues of $931.3 million lagged the consensus mark of $944 million by 1.4%.
On a year-over-year basis, the company’s top line grew 1% but bottom line declined 1.1%. Watsco has been experiencing unfavorable weather in certain markets served. The company’s first quarter, which has one less selling-day than the corresponding period of 2018, is the weakest period of the year on a seasonal basis.
Sales of HVAC equipment (heating, ventilating and air conditioning; accounting for 67% of sales) increased 2% from a year ago. However, sales of other HVAC products (29% of sales) and commercial refrigeration products (4% of sales) declined 2% and 4%, respectively, from the prior-year quarter.
Operating Highlights
Cost of sales grew 0.3% to $697.5 million from the year-ago quarter. Gross margin improved 20 basis points (bps) to 25.1%.
Selling, general & administrative expenses (SG&A) increased 1% from the year-ago quarter to $180.1 million. On a same-store basis, the metric remained flat year over year. However, SG&A expenses, as a percentage of sales, improved 10 bps to 19.2%.
Operating income increased 2% from the prior-year period to $55.1 million during the quarter. Operating margin also improved 10 bps year over year to 5.9%. On a same-store basis, operating income rose 4%, while operating margin expanded 30 bps to a record of 6.1%.
Financial Operations
As of Mar 31, 2019, cash and cash equivalents were $77.3 million compared with $82.9 million at 2018-end. Cash from operations was $52.9 million in the first quarter compared with $41.6 million a year ago.
At the end of the first quarter, Watsco’s debt-to-total capitalization ratio was 8%.
Strategic Highlights
On Apr 4, 2019, the company announced the completion of the acquisition of a distributor of air conditioning and heating products, DASCO Supply. Based in Whippany, NJ, DASCO will provide its resources and technology in order to aid Watsco in accomplishing growth plans.
Acuity Brands, Inc.’s (AYI - Free Report) second-quarter fiscal 2019 adjusted earnings of $1.99 per share topped the Zacks Consensus Estimate of $1.79 by 11.2% and increased 5.3% on a year-over-year basis. Net sales during the quarter came in at $854.4 million, missing the consensus mark of $876.9 million by 2.6%. However, the reported figure increased 2.7% year over year.
United Rentals’ (URI - Free Report) first-quarter 2019 adjusted earnings of $3.31 per share topped the consensus mark of $3.06 by 8.3% and increased 15.3% from the prior-year period. Total revenues of $2.12 billion also surpassed the consensus mark of $2.07 billion by 2.5%. Moreover, the said figure rose 22.1% year over year.
Fastenal Company’s (FAST - Free Report) earnings came in at 68 cents per share in first-quarter 2019, beating the Zacks Consensus Estimate by 1.5% and increasing 11.9% from 61 cents reported a year ago. Also, net sales of $1.31 billion topped the consensus mark of $1.3 billion and grew 10.4% year over year.
Will you retire a millionaire?
One out of every six people retires a multimillionaire. Get smart tips you can do today to become one of them in a new Special Report, “7 Things You Can Do Now to Retire a Multimillionaire.”
Image: Bigstock
Watsco's (WSO) Q1 Earnings Meet Estimates, Revenues Miss
Watsco, Inc. (WSO - Free Report) reported first-quarter 2019 results, wherein earnings met the Zacks Consensus Estimate, while revenues missed the same.
The company reported quarterly earnings of 88 cents per share, in line with the consensus estimate. However, total revenues of $931.3 million lagged the consensus mark of $944 million by 1.4%.
On a year-over-year basis, the company’s top line grew 1% but bottom line declined 1.1%. Watsco has been experiencing unfavorable weather in certain markets served. The company’s first quarter, which has one less selling-day than the corresponding period of 2018, is the weakest period of the year on a seasonal basis.
Watsco, Inc. Price, Consensus and EPS Surprise
Watsco, Inc. Price, Consensus and EPS Surprise | Watsco, Inc. Quote
Product Line Sales Discussion
Sales of HVAC equipment (heating, ventilating and air conditioning; accounting for 67% of sales) increased 2% from a year ago. However, sales of other HVAC products (29% of sales) and commercial refrigeration products (4% of sales) declined 2% and 4%, respectively, from the prior-year quarter.
Operating Highlights
Cost of sales grew 0.3% to $697.5 million from the year-ago quarter. Gross margin improved 20 basis points (bps) to 25.1%.
Selling, general & administrative expenses (SG&A) increased 1% from the year-ago quarter to $180.1 million. On a same-store basis, the metric remained flat year over year. However, SG&A expenses, as a percentage of sales, improved 10 bps to 19.2%.
Operating income increased 2% from the prior-year period to $55.1 million during the quarter. Operating margin also improved 10 bps year over year to 5.9%. On a same-store basis, operating income rose 4%, while operating margin expanded 30 bps to a record of 6.1%.
Financial Operations
As of Mar 31, 2019, cash and cash equivalents were $77.3 million compared with $82.9 million at 2018-end. Cash from operations was $52.9 million in the first quarter compared with $41.6 million a year ago.
At the end of the first quarter, Watsco’s debt-to-total capitalization ratio was 8%.
Strategic Highlights
On Apr 4, 2019, the company announced the completion of the acquisition of a distributor of air conditioning and heating products, DASCO Supply. Based in Whippany, NJ, DASCO will provide its resources and technology in order to aid Watsco in accomplishing growth plans.
Zacks Rank & Key Picks
Watsco currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Peer Releases
Acuity Brands, Inc.’s (AYI - Free Report) second-quarter fiscal 2019 adjusted earnings of $1.99 per share topped the Zacks Consensus Estimate of $1.79 by 11.2% and increased 5.3% on a year-over-year basis. Net sales during the quarter came in at $854.4 million, missing the consensus mark of $876.9 million by 2.6%. However, the reported figure increased 2.7% year over year.
United Rentals’ (URI - Free Report) first-quarter 2019 adjusted earnings of $3.31 per share topped the consensus mark of $3.06 by 8.3% and increased 15.3% from the prior-year period. Total revenues of $2.12 billion also surpassed the consensus mark of $2.07 billion by 2.5%. Moreover, the said figure rose 22.1% year over year.
Fastenal Company’s (FAST - Free Report) earnings came in at 68 cents per share in first-quarter 2019, beating the Zacks Consensus Estimate by 1.5% and increasing 11.9% from 61 cents reported a year ago. Also, net sales of $1.31 billion topped the consensus mark of $1.3 billion and grew 10.4% year over year.
Will you retire a millionaire?
One out of every six people retires a multimillionaire. Get smart tips you can do today to become one of them in a new Special Report, “7 Things You Can Do Now to Retire a Multimillionaire.”
Click to get it free >>