Watsco (NYSE:WSO) Announces Quarterly Earnings Results

Watsco (NYSE:WSO) released its quarterly earnings results on Tuesday. The construction company reported $3.77 EPS for the quarter, missing analysts’ consensus estimates of $4.10 by ($0.33), FiscalAI reports. The company had revenue of $2.22 billion for the quarter, compared to the consensus estimate of $2.21 billion. Watsco had a return on equity of 14.40% and a net margin of 6.53%. The firm’s quarterly revenue was up 7.4% compared to the same quarter last year. During the same quarter last year, the firm posted $3.98 earnings per share.

Watsco Stock Down 5.3%

Shares of NYSE:WSO opened at $305.97 on Tuesday. The company’s fifty day moving average is $307.02 and its two-hundred day moving average is $367.03. The company has a market cap of $12.62 billion, a P/E ratio of 26.54 and a beta of 1.06. Watsco has a 12-month low of $277.34 and a 12-month high of $459.00.

Watsco Dividend Announcement

The company also recently announced a quarterly dividend, which will be paid on Friday, October 30th. Shareholders of record on Friday, October 16th will be paid a dividend of $3.30 per share. This represents a $13.20 annualized dividend and a yield of 4.3%. The ex-dividend date of this dividend is Friday, October 16th. Watsco’s payout ratio is 114.48%.

Key Headlines Impacting Watsco

Here are the key news stories impacting Watsco this week:

• Positive Sentiment: Third-quarter revenue rose 7% year over year to a record $2.22 billion, slightly exceeding analysts’ $2.21 billion estimate. Watsco also generated strong operating cash flow and reported nine-month cash flow growth of 79%. Watsco Reports Record $2.22 Billion Third-Quarter Revenue
• Positive Sentiment: The company expanded through the acquisitions of Jackson Supply Company and The Granite Group, adding 107 locations and approximately $730 million in annualized revenue. Management said its balance sheet, technology platform and improving demand support further growth. Watsco Reports Record Third Quarter Sales, Strong Cash Flow and Improving Demand
• Neutral Sentiment: Watsco operates in HVAC distribution, where replacement and repair demand can be relatively resilient to consumer sentiment. This supports the company’s long-term investment case, although the article does not provide a new earnings estimate or price target. Nobody Brags About Owning an HVAC Distributor
• Negative Sentiment: Adjusted or diluted EPS was $3.77, missing the consensus estimate of $4.10 by $0.33. EPS declined 5% year over year, while net income fell to $182.8 million from $189.2 million and operating income dropped 4% to $225.2 million. The earnings miss and weaker margins are likely the primary reasons for the negative market reaction. Watsco Quarterly Earnings

Analyst Upgrades and Downgrades

WSO has been the subject of several research reports. Stephens reissued an “overweight” rating and set a $485.00 price objective on shares of Watsco in a research note on Monday, August 17th. DA Davidson cut their target price on Watsco from $385.00 to $330.00 and set a “neutral” rating on the stock in a research report on Thursday, July 30th. Zacks Research raised Watsco from a “strong sell” rating to a “hold” rating in a research report on Wednesday, October 21st. Robert W. Baird set a $400.00 target price on Watsco in a report on Thursday, July 30th. Finally, Weiss Ratings lowered Watsco from a “hold (c)” rating to a “hold (c-)” rating in a research report on Tuesday, October 6th. Two investment analysts have rated the stock with a Buy rating and eight have issued a Hold rating to the company. According to MarketBeat, the company presently has an average rating of “Hold” and a consensus price target of $373.62.

About Watsco

Watsco, Inc (NYSE: WSO) is a distributor of heating, ventilation, air conditioning and refrigeration (HVAC/R) equipment and related products. The company supplies residential and light commercial air-conditioning and heating systems, refrigeration equipment, replacement parts, and other supplies used by contractors and service professionals.

Watsco distributes products from leading HVAC/R manufacturers, including equipment and components such as air conditioners, heat pumps, furnaces, air handlers, thermostats, controls, motors and indoor air-quality products.