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WESCO International, Inc. (WCC - Free Report) reported fourth-quarter 2021 adjusted earnings of $3.17 per share, reflecting 160% growth on a year-over-year basis. Also, the bottom line surpassed the Zacks Consensus Estimate by 24.3%. Further, the metric improved 15.7% sequentially.
The company reported quarterly net sales of $4.85 billion, up 17.5% year over year and 2.6% on a sequential basis. Also, the figure beat the Zacks Consensus Estimate by 4.5%.
The top-line growth was primarily driven by a strong performance by three business units and contributions from portfolio expansion.
Top-Line Details
The company operates under three business units, namely, Electrical & Electronic Solutions (EES), Communications & Security Solutions (CSS), and Utility & Broadband Solutions (UBS).
EES (41% of net sales): Sales in the segment were $1.99 billion for the fourth quarter, up 19.6% from the year-ago level. This was driven by solid momentum across construction, original equipment manufacturer and industrial businesses.
WESCO International, Inc. Price, Consensus and EPS Surprise
CSS (31% of net sales): Sales in the segment were $1.51 billion for the reported quarter, which increased 10.6% from the year-ago period. This was attributed to the well-performing security solutions and network infrastructure businesses.
UBS (28% of net sales): Sales in the segment were $1.34 billion for the reported quarter, up 23% from the year-ago reading. This was driven by robust utility, broadband and integrated supply businesses.
Operating Details
Gross margin was 20.8% for the reported quarter, which expanded 120 basis points (bps) from the year-ago level.
Selling, general and administrative expenses were $733.7 million, up 15% from the year-ago reading. As a percentage of net sales, the figure contracted 33 bps year over year to 15.1%.
WESCO’s adjusted operating margin was 5.6%, which expanded 140 bps from the prior-year level.
Adjusted EBITDA as a percentage of sales was 6.6% for the fourth quarter, which also expanded 140 bps year over year.
Balance Sheet & Cash Flow
As of Dec 31, 2021, cash & cash equivalents were $212.6 million, down from $251.8 million on Sep 30, 2021.
Long-term debt was $4.70 billion at fourth quarter-end compared with $4.57 billion in the prior quarter.
WESCO used $105.5 million cash for operations in the fourth quarter. It generated $69.9 million of cash from operations in the previous quarter.
For the fourth quarter, the company reported a negative free cash flow of $115.7 million.
Guidance
For 2022, management expects sales growth of 5-8%. The Zacks Consensus Estimate for 2022 sales is pegged at $18.8 billion.
Adjusted EBITDA margin is expected between 6.7% and 7%.
The company expects adjusted EPS of $11-$12, indicating 10-20% year-over-year growth. The Zacks Consensus Estimate for earnings is pegged at $10.89 per share.
Broadcom is scheduled to release first-quarter fiscal 2022 results on Mar 3.It has gained 24.9% over a year. The long-term earnings growth rate for AVGO is currently projected at 14.5%.
Intuit is slated to report second-quarter fiscal 2022 results on Feb 24. It has gained 26.9% over a year. The long-term earnings growth rate for INTU is currently projected at 15.7%.
Zscaler is slated to report second-quarter fiscal 2022 results on Feb 24. It has gained 27.2% over a year. The long-term earnings growth rate for ZS is currently projected at 37.1%.
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WESCO (WCC) Q4 Earnings & Sales Beat Estimates, Rise Y/Y
WESCO International, Inc. (WCC - Free Report) reported fourth-quarter 2021 adjusted earnings of $3.17 per share, reflecting 160% growth on a year-over-year basis. Also, the bottom line surpassed the Zacks Consensus Estimate by 24.3%. Further, the metric improved 15.7% sequentially.
The company reported quarterly net sales of $4.85 billion, up 17.5% year over year and 2.6% on a sequential basis. Also, the figure beat the Zacks Consensus Estimate by 4.5%.
The top-line growth was primarily driven by a strong performance by three business units and contributions from portfolio expansion.
Top-Line Details
The company operates under three business units, namely, Electrical & Electronic Solutions (EES), Communications & Security Solutions (CSS), and Utility & Broadband Solutions (UBS).
EES (41% of net sales): Sales in the segment were $1.99 billion for the fourth quarter, up 19.6% from the year-ago level. This was driven by solid momentum across construction, original equipment manufacturer and industrial businesses.
WESCO International, Inc. Price, Consensus and EPS Surprise
WESCO International, Inc. price-consensus-eps-surprise-chart | WESCO International, Inc. Quote
CSS (31% of net sales): Sales in the segment were $1.51 billion for the reported quarter, which increased 10.6% from the year-ago period. This was attributed to the well-performing security solutions and network infrastructure businesses.
UBS (28% of net sales): Sales in the segment were $1.34 billion for the reported quarter, up 23% from the year-ago reading. This was driven by robust utility, broadband and integrated supply businesses.
Operating Details
Gross margin was 20.8% for the reported quarter, which expanded 120 basis points (bps) from the year-ago level.
Selling, general and administrative expenses were $733.7 million, up 15% from the year-ago reading. As a percentage of net sales, the figure contracted 33 bps year over year to 15.1%.
WESCO’s adjusted operating margin was 5.6%, which expanded 140 bps from the prior-year level.
Adjusted EBITDA as a percentage of sales was 6.6% for the fourth quarter, which also expanded 140 bps year over year.
Balance Sheet & Cash Flow
As of Dec 31, 2021, cash & cash equivalents were $212.6 million, down from $251.8 million on Sep 30, 2021.
Long-term debt was $4.70 billion at fourth quarter-end compared with $4.57 billion in the prior quarter.
WESCO used $105.5 million cash for operations in the fourth quarter. It generated $69.9 million of cash from operations in the previous quarter.
For the fourth quarter, the company reported a negative free cash flow of $115.7 million.
Guidance
For 2022, management expects sales growth of 5-8%. The Zacks Consensus Estimate for 2022 sales is pegged at $18.8 billion.
Adjusted EBITDA margin is expected between 6.7% and 7%.
The company expects adjusted EPS of $11-$12, indicating 10-20% year-over-year growth. The Zacks Consensus Estimate for earnings is pegged at $10.89 per share.
Zacks Rank & Other Stocks to Consider
Currently, WESCO has a Zacks Rank #2 (Buy).
Other similar-ranked stocks in the broader technology sector include Broadcom (AVGO - Free Report) , Intuit (INTU - Free Report) and Zscaler (ZS - Free Report) , each carrying a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Broadcom is scheduled to release first-quarter fiscal 2022 results on Mar 3.It has gained 24.9% over a year. The long-term earnings growth rate for AVGO is currently projected at 14.5%.
Intuit is slated to report second-quarter fiscal 2022 results on Feb 24. It has gained 26.9% over a year. The long-term earnings growth rate for INTU is currently projected at 15.7%.
Zscaler is slated to report second-quarter fiscal 2022 results on Feb 24. It has gained 27.2% over a year. The long-term earnings growth rate for ZS is currently projected at 37.1%.