We use cookies to understand how you use our site and to improve your experience.
This includes personalizing content and advertising.
By pressing "Accept All" or closing out of this banner, you consent to the use of all cookies and similar technologies and the sharing of information they collect with third parties.
You can reject marketing cookies by pressing "Deny Optional," but we still use essential, performance, and functional cookies.
In addition, whether you "Accept All," Deny Optional," click the X or otherwise continue to use the site, you accept our Privacy Policy and Terms of Service, revised from time to time.
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 Q4 Earnings Miss Estimates, Sales Increased Y/Y: Stock Rises
Read MoreHide Full Article
WESCO International (WCC - Free Report) reported fourth-quarter 2024 adjusted earnings of $3.16 per share, up 19.2% year over year. The bottom line missed the Zacks Consensus Estimate by 1.86%.
Net sales of $5.5 billion rose 0.5% year over year. The figure beat the Zacks Consensus Estimate by 1.52%. Organic sales increased 2.4% year over year.
The company’s shares gained 0.57% in the pre-market trading. WCC shares have returned 4.1% year to date, outperforming the Zacks Computer & Technology sector’s return of 2.2%.
WESCO International, Inc. Price, Consensus and EPS Surprise
The EES Segment (38.6% of Net Sales): Sales in the segment were $2.12 billion, up 1.9% year over year. Organic sales increased 1.0% year over year. Improved business momentum drove a return to profitable growth in the fourth quarter of 2024.
CSS (37.2% of Net Sales): Sales in the segment were $2.05 billion, up 14.2% year over year. Organic sales increased 11.3% on a year-over-year basis. Strong demand for Data Center Solutions fueled double-digit growth in CSS in the fourth quarter of 2024.
UBS (24.2% of Net Sales): Sales in the segment were $1.33 billion, down 16.8% year over year. Organic sales declined 5.9% year over year. WESCO anticipates utility to rebound in the second half of 2025.
WCC Struggles With Margin Contraction
The fourth-quarter 2024 gross margin was 21.2%, marking a year-over-year contraction of 20 basis points (bps), driven by business and project mix in communications and security solutions, including a 30-basis-point headwind from lower supplier volume rebates.
The adjusted EBITDA margin of 6.7% declined 30 bps year over year.
Selling, general and administrative expenses were $807.2 million, up 1.1% year over year. As a percentage of net sales, the figure increased 10 bps year over year to 14.7%.
The adjusted operating margin was 5.7%, which contracted 30 bps year over year.
Balance Sheet & Cash Flow
As of Dec. 31, 2024, cash and cash equivalents were $702.6 million, down from $706.8 million as of Sept. 30, 2024.
The long-term debt was $5.05 billion at the fourth-quarter end compared with $5.01 billion in the prior quarter.
The company generated $276.6 million in cash from operations in the reported quarter compared with $302.1 million in the previous quarter.
For the fourth quarter, WESCO reported a free cash flow of $268.4 million compared with the previous quarter’s $279.5 million.
WESCO Initiates 2025 Guidance
For 2025, the company expects organic sales growth between 2.5% and 6.5%. Sales on a reported basis are expected to be $21.8-$22.7 billion.
WESCO projects the adjusted EBITDA margin between 6.7% and 7.2%.
The adjusted diluted EPS is anticipated between $12 and $14.50 per share.
The free cash flow is expected between $600 and $800 million.
Image: Bigstock
WESCO Q4 Earnings Miss Estimates, Sales Increased Y/Y: Stock Rises
WESCO International (WCC - Free Report) reported fourth-quarter 2024 adjusted earnings of $3.16 per share, up 19.2% year over year. The bottom line missed the Zacks Consensus Estimate by 1.86%.
Find the latest EPS estimates and surprises on Zacks Earnings Calendar.
Net sales of $5.5 billion rose 0.5% year over year. The figure beat the Zacks Consensus Estimate by 1.52%. Organic sales increased 2.4% year over year.
The company’s shares gained 0.57% in the pre-market trading. WCC shares have returned 4.1% year to date, outperforming the Zacks Computer & Technology sector’s return of 2.2%.
WESCO International, Inc. Price, Consensus and EPS Surprise
WESCO International, Inc. price-consensus-eps-surprise-chart | WESCO International, Inc. Quote
WCC’s Top-Line Details
The EES Segment (38.6% of Net Sales): Sales in the segment were $2.12 billion, up 1.9% year over year. Organic sales increased 1.0% year over year. Improved business momentum drove a return to profitable growth in the fourth quarter of 2024.
CSS (37.2% of Net Sales): Sales in the segment were $2.05 billion, up 14.2% year over year. Organic sales increased 11.3% on a year-over-year basis. Strong demand for Data Center Solutions fueled double-digit growth in CSS in the fourth quarter of 2024.
UBS (24.2% of Net Sales): Sales in the segment were $1.33 billion, down 16.8% year over year. Organic sales declined 5.9% year over year. WESCO anticipates utility to rebound in the second half of 2025.
WCC Struggles With Margin Contraction
The fourth-quarter 2024 gross margin was 21.2%, marking a year-over-year contraction of 20 basis points (bps), driven by business and project mix in communications and security solutions, including a 30-basis-point headwind from lower supplier volume rebates.
The adjusted EBITDA margin of 6.7% declined 30 bps year over year.
Selling, general and administrative expenses were $807.2 million, up 1.1% year over year. As a percentage of net sales, the figure increased 10 bps year over year to 14.7%.
The adjusted operating margin was 5.7%, which contracted 30 bps year over year.
Balance Sheet & Cash Flow
As of Dec. 31, 2024, cash and cash equivalents were $702.6 million, down from $706.8 million as of Sept. 30, 2024.
The long-term debt was $5.05 billion at the fourth-quarter end compared with $5.01 billion in the prior quarter.
The company generated $276.6 million in cash from operations in the reported quarter compared with $302.1 million in the previous quarter.
For the fourth quarter, WESCO reported a free cash flow of $268.4 million compared with the previous quarter’s $279.5 million.
WESCO Initiates 2025 Guidance
For 2025, the company expects organic sales growth between 2.5% and 6.5%. Sales on a reported basis are expected to be $21.8-$22.7 billion.
WESCO projects the adjusted EBITDA margin between 6.7% and 7.2%.
The adjusted diluted EPS is anticipated between $12 and $14.50 per share.
The free cash flow is expected between $600 and $800 million.
Zacks Rank & Stocks to Consider
WESCO carries a Zacks Rank #4 (Sell) at present.
Arista Networks (ANET - Free Report) , Bandwidth (BAND - Free Report) and Fastly (FSLY - Free Report) are some better-ranked stocks in the broader sector.
Arista Networks flaunts a Zacks Rank #1 (Strong Buy) at present, and Bandwidth and Fastly carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Arista Networks shares have returned 6.3% year to date. ANET is set to report fourth-quarter 2024 results on Feb.18.
Bandwidth shares have gained 9.3% year to date. BAND is set to report fourth-quarter 2024 results on Feb. 20.
Fastly shares have risen 6.5% year to date. FSLY is set to report fourth-quarter 2024 results on Feb. 12.