FBR Capital Maintains an 'Outperform/Top Pick' on WESCO (WCC); Solid 1Q Beat Driven by Better Revenues and Margins

FBR Capital maintains an 'Outperform/Top Pick' on WESCO International (NYSE: WCC)

FBR analyst says, "WESCO reported solid 1Q operating EPS of $0.74, ahead of our recently raised estimate of $0.72 and consensus $0.70. The earnings beat reflected both revenues and operating income coming in better than our estimates. Total revenue of $1.43 billion was 4% higher than our $1.38 billion estimate with organic revenue growth of 16.5% better than our 12.0% estimate and 15.8% in 4Q. Operating margins of 4.5% were ahead of our 4.4% estimate reflecting solid execution on SG&A and EBIT pull-through of nearly 40% a pick up from the ~32% in 4Q despite the impact from acquisitions. Gross margins improved over last year by 20 bps to 20%. WESCO’s recent acquisitions of Potelcom, TVC and RECO had a ~$0.09 positive impact on the quarter, and commentary suggests trends in these businesses are exceeding plan. Management does not provide any specific guidance but outlook commentary and framework appears positive with WESCO raising its full year sales and margin expectations."

For more ratings news on WESCO International click here and for the rating history of WESCO International click here.

Shares of WESCO International closed at $59.98 yesterday.

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