WESCO International Earnings: Here’s Why Investors Like These Results

WESCO International Inc. (NYSE:WCC) delivered a profit and missed Wall Street’s expectations, AND came up short on beating the revenue expectation. The revenue miss is a negative sign to shareholders seeking high growth out of the company. Shares are up 1.45%.

WESCO International Inc. Earnings Cheat Sheet

Results: Adjusted Earnings Per Share increased 8.7% to $1.25 in the quarter versus EPS of $1.15 in the year-earlier quarter.

Revenue: Rose 13.23% to $1.89 billion from the year-earlier quarter.

Actual vs. Wall St. Expectations: WESCO International Inc. reported adjusted EPS income of $1.25 per share. By that measure, the company missed the mean analyst estimate of $1.34. It missed the average revenue estimate of $1.92 billion.

Quoting Management: Mr. John J. Engel, WESCO’s Chairman and Chief Executive Officer, stated, “Our second quarter results reflect continued solid execution in a challenging economic environment with end market conditions consistent with our prior expectations. While organic sales declined 1% versus prior year, business momentum improved through the quarter with June sales per workday up 2%, driven by growth in Lighting and continued strength in Utility. Our acquisitions continue to perform well and we remain on track to deliver our full year EPS accretion expectations for EECOL. Free cash flow was directed to debt reduction and our financial leverage is now at the upper end of our targeted range on a proforma basis. We are seeing the positive impact of our One WESCO sales, productivity and LEAN initiatives on our business as we continue to invest in our growth engines and manage an active acquisition pipeline. We see excellent opportunities to further expand and strengthen our portfolio in the second half of 2013 into 2014. We expect organic sales growth in the second half but less than our prior expectations, and have revised our full year outlook to approximately $5.15 to $5.35 earnings per diluted share, which equates to 18% to 22% growth over prior year, excluding the ArcelorMittal litigation impacts.”

Key Stats (on next page)…

Revenue increased 4.75% from $1.81 billion in the previous quarter. EPS increased 11.61% from $1.12 in the previous quarter.

Looking Forward: Analysts have a more negative outlook for the company’s next-quarter performance. Over the past three months, the average estimate for next quarter’s earnings has fallen from a profit of $1.62 to a profit $1.58. For the current year, the average estimate has moved down from a profit of $5.67 to a profit of $5.56 over the last ninety days.

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(Company fundamentals provided by Xignite Financials. Email any earnings discrepancies to earnings [at] wallstcheatsheet.com)