Did you analyze how Watsco (WSO Quick QuoteWSO - Free Report) fared in its international operations for the quarter ending September 2025? Given the widespread global presence of this heating and cooling company, scrutinizing the trends in international revenues becomes imperative to assess its financial strength and future growth possibilities.

In the modern, closely-knit global economic landscape, the capacity of a business to access foreign markets is often a key determinant of its financial well-being and growth path. Investors now place great importance on grasping the extent of a company's dependence on international markets, as it sheds light on the firm's earnings stability, its skill in leveraging various economic cycles and its broad growth potential.

Being present in international markets serves as a counterbalance to domestic economic challenges while offering chances to engage with more rapidly evolving economies. However, this kind of diversification introduces challenges like currency fluctuations, geopolitical uncertainties and varying market trends.

While delving into WSO's performance for the past quarter, we observed some fascinating trends in the revenue from its foreign segments that are commonly modeled and observed by analysts on Wall Street.

The company's total revenue for the quarter stood at $2.07 billion, declining 4.3% year over year. Now, let's delve into WSO's international revenue breakdown to gain insights into the significance of its operations beyond home turf.

Trends in WSO's Revenue from International Markets

During the quarter, Canada contributed $87.81 million in revenue, making up 4.3% of the total revenue. When compared to the consensus estimate of $100.93 million, this meant a surprise of -13%. Looking back, Canada contributed $93.71 million, or 4.5%, in the previous quarter, and $96.6 million, or 4.5%, in the same quarter of the previous year.

Latin America and the Caribbean generated $90.83 million in revenues for the company in the last quarter, constituting 4.4% of the total. This represented a surprise of -14.42% compared to the $106.13 million projected by Wall Street analysts. Comparatively, in the previous quarter, Latin America and the Caribbean accounted for $94.35 million (4.6%), and in the year-ago quarter, it contributed $108.44 million (5%) to the total revenue.

International Market Revenue Projections

It is projected by analysts on Wall Street that Watsco will post revenues of $1.65 billion for the ongoing fiscal quarter, a decline of 6.1% from the year-ago quarter. The expected contributions from Canada and Latin America and the Caribbean to this revenue are 5.1%, and 5.3%, translating into $83.48 million, and $86.39 million, respectively.

Analysts expect the company to report a total annual revenue of $7.33 billion for the full year, marking a decrease of 3.8% compared to last year. The expected revenue contributions from Canada and Latin America and the Caribbean are projected to be 4.9% ($360.5 million), and 5.3% ($386.91 million) of the total revenue, in that order.

Wrapping Up

Relying on international markets for revenues, Watsco faces both prospects and perils. Thus, tracking the company's international revenue trends is essential for accurately projecting its future trajectory.

In a world where international interdependencies and geopolitical conflicts are ever-increasing, Wall Street analysts closely monitor these trends for companies having international presence to adjust their earnings forecasts. Of course, there are several other factors, including a company's standing within its home borders, that influence analysts' earnings forecasts.

At Zacks, a company's changing earnings outlook is given considerable attention due to its proven, strong influence on a stock's price performance in the near term. The connection here is straightforward and positive: when earnings estimates are revised upward, the stock price generally follows suit, increasing as well.

The Zacks Rank, our proprietary stock rating tool, comes with an externally validated impressive track record. It effectively utilizes shifts in earnings projections to act as a dependable barometer for forecasting short-term stock price trends.

At present, Watsco holds a Zacks Rank #5 (Strong Sell). This ranking implies that its near-term performance might underperform the overall market movement. You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>> .

Watsco's Recent Stock Market Performance

Over the preceding four weeks, the stock's value has diminished by 4.2%, against an upturn of 0.3% in the Zacks S&P 500 composite. In parallel, the Zacks Construction sector, which counts Watsco among its entities, has depreciated by 0.9%. Over the past three months, the company's shares have seen a decline of 15.3% versus the S&P 500's 6.4% increase. The sector overall has witnessed an increase of 1.1% over the same period.