Watsco Posts $2.22B in Q3 Revenue
WSO is trading near its 52-week low of $277.34 (11% above the low) on elevated volume (1.9× avg).
Summary
Watsco reported third-quarter revenue of $2.22B, the first top-line datapoint for the quarter, alongside EPS of $3.77 and net income of $155.4M. Residential units rose 5% in the quarter, same-store sales were up 4%, and year-to-date operating cash flow was up 79%. Gross margin fell to 26.4% from 27.5% and operating income dropped 4% to $225 million. The comparison that matters is Q2, when revenue grew just 2% to $2.1B while EPS fell to $4.00 from $4.52 and gross margin slid to 27.5% from 29.3% — the margin pressure was the story last quarter. The company is also absorbing The Granite Group, the $505M Northeast plumbing and HVAC deal (80% cash, 20% stock) announced in September, with 338,176 shares registered for resale in mid-October. The margin line will determine whether the revenue base is translating into earnings.
Updated with an SEC 8-K filing · What changed
Updates
· SEC 8-K — Watsco's Q3 gross margin fell to 26.4% from 27.5% and operating income dropped 4% to $225 million, with same-store sales up 4%.
At the time of this announcement, WSO was trading at $307.00 on NYSE in the Trade & Services sector, with a market capitalization of approximately $12.7B. The 52-week trading range was $277.34 to $459.00. This news item was assessed with negative market sentiment and an importance score of 7 out of 10. Source: Dow Jones Newswires.