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WESCO's (WCC) Q3 Earnings and Revenues Surpass Estimates

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WESCO International, Inc. (WCC - Free Report) reported third-quarter 2020 adjusted earnings of $1.66 per share, which reflects a 9.2% year-over-year increase. Also, the bottom line surpassed the Zacks Consensus Estimate of $1.37 per share.

The company reported quarterly net sales of $4.14 billion, up 93% year over year. The increase was due to its merger with Anixter that was completed on Jun 22, 2020, partially offset by the COVID-19 pandemic.

Also, the figure surpassed the Zacks Consensus Estimate by 1.6%.

Top-Line Details

During the third quarter, the company organized the business into three strategic business units, namely, Electrical & Electronic Solutions (EES), Communications & Security Solutions (CSS) and Utility & Broadband Solutions (UBS).

EES: Revenues in this segment were $1.7 billion for the third quarter, up 32.3% from the year-ago period.

CSS: Revenues in this segment were $1.4 billion for the third quarter, up 488.7% from the year-ago period.

UBS: Revenues in this segment were $1.1 billion for the third quarter, up 66% from the year-ago period.

WESCO International, Inc. Price, Consensus and EPS Surprise

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 19.6% for the reported quarter, which expanded 100 basis points (bps) from the year-ago period.

Adjusted selling, general and administrative expenses were $567.6 million, or 13.7% of net sales for the third quarter.

WESCO’s adjusted operating margin came in at 4.8%, which expanded 40 bps from the prior-year quarter due to higher sales.

Balance Sheet & Cash Flow

At third quarter-end, cash & cash equivalents were $352.2 million, up from $265.2 million in the prior-year comparable period. Net long-term debt for third-quarter 2020 was $4.9 billion, down $280 million from the prior-year period.

WESCO generated $286.3 million of cash from operations and $307.4 million in free cash flow for the reported quarter.

Zacks Rank & Other Key Picks

WESCO currently has a Zacks Rank #2 (Buy). Other top-ranked stocks in the broader technology sector include Marchex, Inc. (MCHX - Free Report) , Overstock.com, Inc. (OSTK - Free Report) and Revolve Group, Inc. (RVLV - Free Report) , each carrying a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Long-term earnings growth for Marchex, Overstock.com, and Revolve Group is currently projected at 15%, 20% and 17.3%, respectively.

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