WESCO Int'l (WCC) Tops Q1 EPS by 62c, Revenues Beat; Raises FY21 EPS Guidance Above Consensus

WESCO Int'l (NYSE: WCC) reported Q1 EPS of $1.43, $0.62 better than the analyst estimate of $0.81. Revenue for the quarter came in at $4.04 billion versus the consensus estimate of $4 billion.

First quarter summary:

• Net sales of $4.0 billion, up more than double due to the Anixter merger
  • Up 3.2% on a pro forma workday-adjusted basis
• Operating profit of $133.3 million; operating margin of 3.3%
  • Gross margin of 20.1%, up 100 basis points year-over-year and 50 bps basis points sequentially
  • Adjusted operating profit of $170.6 million; adjusted operating margin of 4.2%, up 90 basis points
  • Adjusted EBITDA of $216.5 million; adjusted EBITDA margin of 5.4%, up 100 basis points
• Earnings per diluted share of $0.87
  • Adjusted earnings per diluted share of $1.43
• Operating cash flow of $120.5 million
  • Free cash flow of $124.8 million, 141% of adjusted net income
• Leverage of 4.9x; improvement of 0.4x sequentially and 0.8x since Anixter merger
  • Net debt reduction of $144 million in the first quarter, and $534 million since the Anixter merger
• Raising 2021 outlook for adjusted earnings per diluted share to a range of $6.80 to $7.30

“We’re off to a great start to the year and delivered excellent results across the board that exceeded our expectations. I am very proud of our team and the work that they are doing in executing our integration plan, delivering the synergies, and capturing the value of the transformational combination of WESCO and Anixter,” said John Engel, Chairman, President and CEO. “We’re outperforming our markets, delivering significant margin expansion, and generating very strong free cash flow. With over $500 million of debt reduction over the last three quarters, our financial leverage is now below 5.0X, showing the power of our business model. The first quarter is another strong proof point of the substantial value creation potential of WESCO plus Anixter.”

“We are seeing positive sales and margin momentum across each of our three global business units. Backlog has reached a new all-time record level, our margin improvement programs are generating results, and structural cost takeout has increased our operating leverage. As a result of our strong first quarter results and accelerated synergy realization to start the year, we are raising our full-year 2021 outlook for sales, synergies, and profitability. We now expect sales to increase 4.5% to 7.5%, adjusted EBITDA margin to expand to 5.8% to 6.1%, and adjusted EPS to grow to $6.80 to $7.30.”

“The strength of our franchise, power of our industry-leading value proposition, and benefits of our increased scale, is now more evident than ever. As the economic recovery accelerates, we are exceptionally well positioned to capitalize on the secular growth trends of electrification, automation, communications and security.”

GUIDANCE:

WESCO Int'l sees FY2021 EPS of $6.80-$7.30, versus the consensus of $5.96.

For earnings history and earnings-related data on WESCO Int'l (WCC) click here.

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