On October 27, 2016, WESCO reported a 3% sales decrease for the third quarter compared to 2015. Net sales for 3Q were $1.86 billion, compared to $1.92 billion in 2015. You can read the entire earnings report here.
After WESCO released the report, Chairman, President and CEO of WESCO John Engel spoke with reporters about the third quarter and the future economic outlook. While WESCO reported the loss, Engel points out the real problem in the third quarter happened last August.
“Construction was down double digits organically in the month of August,” Engel told reporters in a conference call. “When you look at how backlog performed across the quarter, backlog actually was flat sequentially across the quarter, it had grown across the month of August, so we entered September and we thought we’d have a very nice pick up in sales. September was better, but did not make up all of the losses.
Engel added that the fourth quarter is already off to a better start, with stronger results already showing in October.
“So if you fast-forward now to October, I mentioned that October is off to a positive start,” Engel added. “It’s flat on a consolidated basis. In fact, it’s in the green. We’re slightly positive through month to date on our sales. All-in reported sales, consolidated, it’s driven by a return to growth in construction thus far in October month to date.”
“I am very encouraged by the, as I said, by the October start in terms of sales, and again it’s driven by a return to growth in construction,” Engel said.
But a drag on the WESCO earnings, and the rest of the electrical distribution supply chain, remains in the industrial sector. Engel believes the industrial arena has not hit bottom.
“There is still a number of our oil and gas customers that are planning further cost reduction activities. So until that is done, I would say that all in we’re not really in the bottoming – we haven’t really bottomed,” Engel reported.
But he did add that he is seeing some positive momentum in industrial for next year, and his customers are seeing it, too.
“Our oil and gas customers see that as well, and that’s encouraging. So that’s not going to impact Q4. So the question is going to be when does that kick in 2017?” Engel said.
Tagged with tED