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PITTSBURGH - On Thursday, Wesco International (NYSE:WCC) reported strong third quarter results that exceeded analyst expectations, with record sales driven by robust data center growth and a return to growth in its utility business.
Wesco shares edged up 0.75% in pre-market trading following the results.
The business-to-business distribution and supply chain solutions provider posted third quarter adjusted earnings of $3.92 per share, beating analyst estimates of $3.82. Revenue reached a record $6.2 billion, up 12.9% YoY and well above the consensus estimate of $5.9 billion.
"We delivered very strong results in the third quarter and again outperformed the market with our leading portfolio of products, services, and solutions," said John Engel, Chairman, President, and CEO. "Sales growth accelerated this year, with organic sales up 6% in the first quarter, 7% in the second quarter, and 12% in the third quarter."
Data center sales were particularly strong at $1.2 billion, up approximately 60% compared to the same period last year. The company’s utility business also showed improvement with increased investor-owned utility sales growth.
Organic sales growth was 12.1% YoY and 4.8% sequentially, with all three business segments contributing to the growth. The Communications and Security Solutions (CSS) segment led with 18.3% organic growth, followed by Electrical and Electronic Solutions (EES) at 11.9%, while the Utility and Broadband Solutions (UBS) segment returned to growth with a 3.4% increase.
Adjusted EBITDA rose 6.3% to $423 million, with adjusted EBITDA margin of 6.8%, up 10 basis points sequentially but down 50 basis points from the prior year.
Based on the strong performance, Wesco raised its full-year outlook, now expecting organic sales growth of 8% to 9%, up from its previous guidance of 5% to 7%. The company also increased its adjusted EPS forecast to a range of $13.10 to $13.60, compared to the consensus estimate of $13.25.
However, Wesco reduced its full-year free cash flow outlook due to increased working capital needs associated with rising demand and higher sales growth.
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