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WESCO's (WCC) Q1 Earnings & Revenues Fall Short of Estimates
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WESCO International, Inc. (WCC - Free Report) reported first-quarter 2019 adjusted earnings of 91 cents per share, which reflects a 4.3% year-over-year improvement. However, the bottom line missed the Zacks Consensus Estimate of 97 cents per share.
Net sales in the quarter were $1.97 billion, up 0.4% year over year. However, the figure lagged the Zacks Consensus Estimate by 1.7%.
The company’s sales in the United States were down 1% from the year-ago quarter. In Canada, sales were also down 4% year over year due to weakness in construction, as many local governments shut down projects starting in March as a result of the pandemic outbreak. Industrial sales were down in the United States but up in Canada during the first quarter. Overall international sales were down from the year-ago quarter.
The company’s organic sales in the reported quarter declined 1.7% from the prior-year period. However, acquisitions contributed 0.5% to sales.
Management stated that sales were negatively impacted by the COVID-19 outbreak.The virus slowed down sales across all market verticals beginning in the second half of March, with monthly sales declining 14%.
Nevertheless, the bidding activity was robust across all market verticals, as is evident from numerous contract renewals and new wins in the quarter. The company remains focused on strategic investments and margin expansion initiatives. Further, WESCO stays confident about product portfolio strength, value-added services and end-market momentum. These are likely to help the stock rebound in the near term.
WESCO International, Inc. Price, Consensus and EPS Surprise
Gross margin was 19.1% in the reported quarter, which contracted 40 basis points (bps) from the year-ago period. This was due to an unfavorable business mix and hike in supplier prices.
Selling, general and administrative expenses increased 0.97% on a year-over-year basis.
WESCO’s operating margin came in at 3.1%, contracting 50 bps from the prior-year quarter due to lower sales.
Balance Sheet & Cash Flow
As the end of the first quarter, cash & cash equivalents were $342.6 million, up from $150.9 million in the prior-year comparable period. Long-term debt in first-quarter 2019 was $1.54 billion compared with $1.26 billion at the end of the previous quarter.
WESCO generated $31.5 million of cash from operations and $15.8 million in free cash flow in the reported quarter.
Long-term earnings growth for Akamai, Inuvo, and Shopify is currently projected at 12.3%, 30% and 25.8%, respectively.
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WESCO's (WCC) Q1 Earnings & Revenues Fall Short of Estimates
WESCO International, Inc. (WCC - Free Report) reported first-quarter 2019 adjusted earnings of 91 cents per share, which reflects a 4.3% year-over-year improvement. However, the bottom line missed the Zacks Consensus Estimate of 97 cents per share.
Net sales in the quarter were $1.97 billion, up 0.4% year over year. However, the figure lagged the Zacks Consensus Estimate by 1.7%.
The company’s sales in the United States were down 1% from the year-ago quarter. In Canada, sales were also down 4% year over year due to weakness in construction, as many local governments shut down projects starting in March as a result of the pandemic outbreak. Industrial sales were down in the United States but up in Canada during the first quarter. Overall international sales were down from the year-ago quarter.
The company’s organic sales in the reported quarter declined 1.7% from the prior-year period. However, acquisitions contributed 0.5% to sales.
Management stated that sales were negatively impacted by the COVID-19 outbreak.The virus slowed down sales across all market verticals beginning in the second half of March, with monthly sales declining 14%.
Nevertheless, the bidding activity was robust across all market verticals, as is evident from numerous contract renewals and new wins in the quarter. The company remains focused on strategic investments and margin expansion initiatives. Further, WESCO stays confident about product portfolio strength, value-added services and end-market momentum. These are likely to help the stock rebound in the near term.
WESCO International, Inc. Price, Consensus and EPS Surprise
WESCO International, Inc. price-consensus-eps-surprise-chart | WESCO International, Inc. Quote
Operating Details
Gross margin was 19.1% in the reported quarter, which contracted 40 basis points (bps) from the year-ago period. This was due to an unfavorable business mix and hike in supplier prices.
Selling, general and administrative expenses increased 0.97% on a year-over-year basis.
WESCO’s operating margin came in at 3.1%, contracting 50 bps from the prior-year quarter due to lower sales.
Balance Sheet & Cash Flow
As the end of the first quarter, cash & cash equivalents were $342.6 million, up from $150.9 million in the prior-year comparable period. Long-term debt in first-quarter 2019 was $1.54 billion compared with $1.26 billion at the end of the previous quarter.
WESCO generated $31.5 million of cash from operations and $15.8 million in free cash flow in the reported quarter.
Zacks Rank & Key Picks
WESCO currently has a Zacks Rank #4 (Sell). Some better-ranked stocks in the broader technology sector include Akamai Technologies, Inc. (AKAM - Free Report) , Inuvo, Inc. (INUV - Free Report) and Shopify Inc. (SHOP - Free Report) , each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Long-term earnings growth for Akamai, Inuvo, and Shopify is currently projected at 12.3%, 30% and 25.8%, respectively.
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Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.
Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look.
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