Equipment distributor Watsco (NYSE: WSO) will be announcing earnings results this Wednesday before market open. Here’s what to expect.
Watsco missed analysts’ revenue expectations by 7.3% last quarter, reporting revenues of $1.53 billion, down 2.2% year on year. It was a disappointing quarter for the company, with a significant miss of analysts’ adjusted operating income estimates and a significant miss of analysts’ EBITDA estimates.
Is Watsco a buy or sell going into earnings? Read our full analysis here, it’s free.
This quarter, analysts are expecting Watsco’s revenue to grow 3.9% year on year to $2.22 billion, slowing from the 6.8% increase it recorded in the same quarter last year. Adjusted earnings are expected to come in at $4.84 per share.
The majority of analysts covering the company have reconfirmed their estimates over the last 30 days, suggesting they anticipate the business to stay the course heading into earnings. Watsco has missed Wall Street’s revenue estimates six times over the last two years.
Looking at Watsco’s peers in the industrial distributors segment, some have already reported their Q2 results, giving us a hint as to what we can expect. Fastenal delivered year-on-year revenue growth of 8.6%, beating analysts’ expectations by 0.5%, and Richardson Electronics reported revenues up 9.5%, falling short of estimates by 3.7%. Fastenal traded up 4.2% following the results while Richardson Electronics was also up 10.9%.
Read our full analysis of Fastenal’s results here and Richardson Electronics’s results here.
There has been positive sentiment among investors in the industrial distributors segment, with share prices up 6.5% on average over the last month. Watsco is up 8.6% during the same time and is heading into earnings with an average analyst price target of $479.73 (compared to the current share price of $479.70).
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