Watsco (WSO) Misses Q2 EPS by 23c; Announces 24% Dividend Hike

Watsco (NYSE: WSO) reported Q2 EPS of $1.82, $0.23 worse than the analyst estimate of $2.05. Revenue for the quarter came in at $1.21 billion versus the consensus estimate of $1.29 billion.

Albert H. Nahmad, Watsco’s Chairman and CEO, stated: “Our summer selling season started later than normal this year, and record sales and profits in June were insufficient to offset softer business conditions during the early part of the quarter. July sales trends have accelerated to double-digit growth and we believe profits will follow. Looking long-term, we remain very positive about our basic fundamentals – the execution of industry-leading technologies, continued acceptance by consumers of higher-efficiency replacement HVAC systems, a culture driven to gain market share, improved operating efficiency and the strategic use of our balance sheet to grow our business.”

Mr. Nahmad added: “Watsco has produced $337 million of operating cash flow over the last 12 months, or over $10.00 per share. Given this cash flow and our continued confidence in our business, we are pleased to increase Watsco’s annual dividend by 24% to $4.20 per share beginning with our October quarterly payment. As evidenced by our long-term track record, it is always our intention to share cash flow through increasing dividends while retaining the ability to invest in our network and evaluate additional opportunities that come our way.”

Dividend Boost:

Watsco also announced today that its Board of Directors has approved a 24% increase in its annual dividend to $4.20 per share on each outstanding share of its Common and Class B common stock. The increase will be reflected in the Company’s next regular dividend payment beginning in October 2016.

Albert H. Nahmad, Watsco’s Chairman & CEO stated: “We are pleased to be able to increase dividends to our shareholders. This latest increase reflects our confidence in the business and is supported by our continued positive cash flow and our strong balance sheet.”

Watsco has paid dividends to shareholders for more than 40 consecutive years. The Company’s philosophy is to share increasing amounts of cash flow through higher dividends while maintaining a conservative balance sheet with continued capacity to build its distribution network. Future changes in dividends are considered in light of investment opportunities, cash flow, general economic conditions and Watsco’s overall financial condition.

For earnings history and earnings-related data on Watsco (WSO) click here.

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