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.
WESCO (WCC) Q4 Earnings Lag Estimates, Revenues Dip Y/Y
Read MoreHide Full Article
WESCO International (WCC - Free Report) reported fourth-quarter 2023 adjusted earnings of $2.65 per share, down 35.8% year over year. Also, the bottom line lagged the Zacks Consensus Estimate by 1.15%.
Net sales of $5.47 billion fell 1.5% year over year. The figure missed the Zacks Consensus Estimate by 1.66%. Organic sales declined 2.6% year over year.
Top-Line Details
EES (38.1% of Net Sales): Sales in the segment were $2.08 billion, down 3.9% year over year. Organic sales declined 4.1% due to declines in construction and original equipment manufacturers (“OEM”), partially offset by the continued positive momentum in the industrial business, price inflation and the benefits of cross-selling.
CSS (32.7% of Net Sales): Sales in the segment were $1.79 billion, up 1.6% year over year. Organic sales dipped 1.4% on a volume decline in security solutions.
UBS (29.2% of Net Sales): Sales in the segment were $1.60 billion, down 1.8% year over year.
WESCO International, Inc. Price, Consensus and EPS Surprise
The gross margin contracted 50 basis points (bps) on a year-over-year basis to 21.4%.
Selling, general and administrative expenses were $798.8 million, up 2.7% year over year. As a percentage of net sales, the figure increased 60 bps year over year to 14.6%.
The adjusted operating margin was 6%, which contracted 120 bps year over year.
Balance Sheet & Cash Flow
As of Dec 31, 2023, cash and cash equivalents were $524.1 million, up from $631.4 million as of Sep 30, 2023.
Long-term debt was $5.31 billion at the fourth-quarter end compared with $5.37 billion in the prior quarter.
The company generated $69.3 million in cash from operations compared with $361.7 million in the previous quarter.
For the fourth quarter, WESCO reported a free cash flow of $59.2 million.
Guidance
For 2024, WESCO expects an adjusted EBITDA margin between 7.5% and 7.9%, and an adjusted EBITDA of $1.75 billion at the mid-point.
The free cash flow is expected to be $700 million.
Zacks Rank & Stocks to Consider
WESCO has a Zacks Rank #3 (Hold) at present.
WCC shares have declined 23.7% year to date, outperforming the Zacks Computer & Technology sector’s growth of 6.4%.
Image: Bigstock
WESCO (WCC) Q4 Earnings Lag Estimates, Revenues Dip Y/Y
WESCO International (WCC - Free Report) reported fourth-quarter 2023 adjusted earnings of $2.65 per share, down 35.8% year over year. Also, the bottom line lagged the Zacks Consensus Estimate by 1.15%.
Net sales of $5.47 billion fell 1.5% year over year. The figure missed the Zacks Consensus Estimate by 1.66%. Organic sales declined 2.6% year over year.
Top-Line Details
EES (38.1% of Net Sales): Sales in the segment were $2.08 billion, down 3.9% year over year. Organic sales declined 4.1% due to declines in construction and original equipment manufacturers (“OEM”), partially offset by the continued positive momentum in the industrial business, price inflation and the benefits of cross-selling.
CSS (32.7% of Net Sales): Sales in the segment were $1.79 billion, up 1.6% year over year. Organic sales dipped 1.4% on a volume decline in security solutions.
UBS (29.2% of Net Sales): Sales in the segment were $1.60 billion, down 1.8% year over year.
WESCO International, Inc. Price, Consensus and EPS Surprise
WESCO International, Inc. price-consensus-eps-surprise-chart | WESCO International, Inc. Quote
Operating Details
The gross margin contracted 50 basis points (bps) on a year-over-year basis to 21.4%.
Selling, general and administrative expenses were $798.8 million, up 2.7% year over year. As a percentage of net sales, the figure increased 60 bps year over year to 14.6%.
The adjusted operating margin was 6%, which contracted 120 bps year over year.
Balance Sheet & Cash Flow
As of Dec 31, 2023, cash and cash equivalents were $524.1 million, up from $631.4 million as of Sep 30, 2023.
Long-term debt was $5.31 billion at the fourth-quarter end compared with $5.37 billion in the prior quarter.
The company generated $69.3 million in cash from operations compared with $361.7 million in the previous quarter.
For the fourth quarter, WESCO reported a free cash flow of $59.2 million.
Guidance
For 2024, WESCO expects an adjusted EBITDA margin between 7.5% and 7.9%, and an adjusted EBITDA of $1.75 billion at the mid-point.
The free cash flow is expected to be $700 million.
Zacks Rank & Stocks to Consider
WESCO has a Zacks Rank #3 (Hold) at present.
WCC shares have declined 23.7% year to date, outperforming the Zacks Computer & Technology sector’s growth of 6.4%.
Dell Technologies (DELL - Free Report) , Itron (ITRI - Free Report) and CrowdStrike (CRWD - Free Report) are some better-ranked stocks that investors can consider in the broader sector, each sporting a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Dell Technologies shares have gained 9.8% year to date. DELL is set to report its fourth-quarter fiscal 2024 results on Feb 29.
Itron shares have declined 4.1% year to date. ITRI is set to report its fourth-quarter 2023 results on Feb 26.
CrowdStrike shares have jumped 26.3% year to date. CRWD is set to report its fourth-quarter fiscal 2024 results on Mar 5.