Watsco Q3 revenue slightly beats on acquisition boost
WSO•Watsco’s third-quarter revenue rose 7% to $2.22 billion, slightly above the $2.21 billion consensus, while diluted EPS fell 5% year over year to $3.77. Jackson Supply contributed $78 million in sales, up 16% from a year earlier.
1. Revenue and earnings
Watsco’s third-quarter revenue increased 7% to $2.22 billion, slightly beating analyst expectations of $2.21 billion. Diluted EPS was $3.77, down 5% from the prior year.
2. Growth and margins
The Jackson Supply acquisition contributed $78 million in sales, up 16% from a year earlier. Residential equipment sales rose 7%, as stabilization and higher unit volumes and selling prices supported results. Gross margin declined due to customer and end-market mix, less significant OEM pricing actions and slower growth in non-equipment products.
3. Company outlook
Watsco said its long-range objectives for sales, margin and cash flow generation remain intact. It sees continued improvement in end-market demand and residential unit volume growth, and reported further momentum in same-store sales growth early in the fourth quarter.
