PITTSBURGH - Wesco International (NYSE: NYSE:WCC), a global leader in supply chain solutions and logistics, reported second-quarter earnings that fell short of Wall Street expectations.
The company's adjusted earnings per share (EPS) came in at $3.21, missing the analyst estimate of $3.59. Revenue also did not meet expectations, with the company posting $5.48 billion against the consensus estimate of $5.56 billion.
The company's stock fell by 5% following the announcement. The decrease in share price reflects concerns over Wesco's performance and future outlook, as the company also revised its full-year guidance downward, now expecting organic sales growth ranging from a decline of 1.5% to an increase of 0.5% compared to the previous year, and an adjusted EBITDA margin between 7.0% to 7.3%.
Wesco's second-quarter net sales showed a 4.6% decrease year-over-year (YoY), with organic sales down 0.8% YoY. Despite these declines, the company experienced a 4.7% sequential increase in sales. The reported operating profit was $324 million, with an operating margin of 5.9%. The gross margin improved slightly YoY, rising from 21.6% to 21.9%.
John Engel, Chairman, President, and CEO, commented on the results, "Our second quarter results were somewhat below our expectations for a low single-digit decline in reported sales against a continued mixed and multi-speed economic environment." Engel attributed the lower-than-expected performance to a significant slowdown in purchases by utility customers and customer destocking, which impacted the company's Utility and Broadband Solutions business.
Despite the challenges faced in the second quarter, Wesco remains optimistic about its long-term growth, citing an increase in AI-driven data center growth and the completion of strategic acquisitions. Engel also noted the company's strong free cash flow generation in the first half of the year and its continued execution of capital allocation strategies, including a $300 million share repurchase.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.