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WESCO (WCC) Q4 Earnings Lag Estimates, Revenues Dip Y/Y
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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.