PITTSBURGH - WESCO International, Inc. (NYSE: WCC), a leading provider of business-to-business distribution, logistics services and supply chain solutions, reported its first quarter earnings, revealing a decline in adjusted earnings per share (EPS) but surpassing revenue expectations.
The company announced an adjusted EPS of $2.30 for the first quarter of 2024, falling short of the analyst estimate of $2.55. However, WESCO's revenue for the quarter reached $5.35 billion, exceeding the consensus estimate of $5.29 billion.
Compared to the same period last year, the company's net sales decreased by 3.1% from $5.5 billion. This decline was attributed to a 3.2% drop in organic sales and volume declines across all segments, partially mitigated by price inflation. Despite the lower sales figures, WESCO's free cash flow generation was robust, recording a record $731 million in the first quarter and more than $1.4 billion over the trailing twelve months.
John Engel, Chairman, President, and CEO of WESCO, commented on the results, "Our first quarter sales met our expectations and were consistent with the outlook we provided during the quarter." He also highlighted the company's strong cash flow performance and the strategic divestiture of the Wesco Integrated Supply business, which is expected to bolster WESCO's capital allocation strategies and share repurchase activity.
For the full year, WESCO is maintaining its previous outlook for organic sales growth and adjusted EBITDA margin. The company has also updated its full-year free cash flow outlook to $800 million to $1 billion, reflecting the strong cash performance in the first quarter. Engel expressed confidence in the company's long-term growth trends and its ability to leverage its global capabilities and scale.
Operating profit for the first quarter of 2024 was $263.0 million, a 24.1% decrease from the first quarter of the previous year. The company faced headwinds from a shift in sales mix, lower supplier volume rebates, and unfavorable inventory adjustments. To address these challenges, WESCO implemented restructuring measures, including headcount reduction actions.
As the company did not provide specific guidance for the next sequential quarter or full-year EPS, a direct comparison with analyst consensus is not available. However, the company's focus on continual improvement and internal investments is intended to enhance future performance and capabilities.
Investors and analysts will continue to monitor WESCO's performance closely, especially in light of the company's strategic moves and the broader economic environment's impact on its business segments.
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