Watsco (WSO) Misses Q3 EPS by 13c, Miss on Revenues; Offers FY17 EPS Guidance Below Consensus

Watsco (NYSE: WSO) reported Q3 EPS of $1.82, $0.13 worse than the analyst estimate of $1.95. Revenue for the quarter came in at $1.23 billion versus the consensus estimate of $1.26 billion.

Outlook for 2017

Watsco expects continued record performance in 2017 with full-year diluted earnings per share in the range of $5.50 to $5.60 per share.

Third Quarter Results

Key performance metrics:

• 2% increase in earnings per share to a record $1.82
• 3% increase in net income to a record $65 million
• Flat SG&A expenses
• 4% decrease in operating income to $114 million (9.3% operating margin)
• 46% increase in operating cash flow to $152 million

Sales trends:

• 1% decrease in sales to $1.23 billion (flat on a same-store basis)
• Flat sales for HVAC equipment (68% of sales), including 2% increase in residential products
• 4% decrease in other HVAC products (27% of sales)
• 4% decrease in commercial refrigeration products (5% of sales)

GUIDANCE:

Watsco sees FY2017 EPS of $5.50-$5.60, versus the consensus of $5.73.

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

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