WESCO Reports First Quarter 2014 Results

WESCO International, Inc. (NYSE: WCC), announced net sales of $1,810.8 million for the first quarter of 2014 – an increase of 0.2 percent compared to $1,808.1 million for the first quarter of 2013. The firm’s organic sales increased 1.6 percent, acquisitions positively impacted sales by 0.5 percent, and foreign exchange negatively impacted sales by 1.9 percent. Sequentially, WESCO’s sales decreased 3.7%, and organic sales decreased 3.1 percent.

For the first quarter of 2014, WESCO’s gross profit was $374.8 million, or 20.7 percent of sales, compared to $381.1 million, or 21.1 percent of sales, for the first quarter of 2013. The company’s selling, general & administrative (SG&A) expenses were $265.5 million, or 14.7 percent of sales, compared to $227.5 million or 12.6% of sales, for the first quarter of 2013.  

WESCO’s operating profit was $93.0 million for the first quarter, compared to $136.9 million for the first quarter of 2013. Operating profit as a percentage of sales was 5.1 percent and 7.6 percent in 2014 and 2013, respectively. First quarter 2014 operating profit decreased 50 basis points from first quarter 2013 adjusted operating profit of $100.8 million, or 5.6 percent of sales.

Earnings per diluted share for the first quarter of 2014 were $0.97 per share, based on 53.4 million diluted shares, compared to $1.60 per share in the first quarter of 2013, based on 52.4 million diluted shares. WESCO’s earnings per diluted share in the first quarter of 2014 decreased 13.4% from adjusted earnings per diluted share of $1.12 in the corresponding prior year period.

“Our first quarter results reflect an improving U.S. economy largely offset by the impacts of severe winter weather conditions in both the U.S and Canada,” said John J. Engel, chairman and CEO, in a press release. “Sales in the U.S. were up approximately 3 percent with mid-single digit organic sales growth in all of our end markets, except construction, where sales declined primarily due to weather related project delays.” 

According to Engel, the firm continues to invest in its growth engines and maintain a view that “scale matters” in distribution. “The acquisitions of LaPrairie and Hazmasters were excellent additions to our Canadian business in the first quarter,” he pointed out. “As a result of solid free cash flow generation, financial leverage remained within our targeted range, including the impact of these two acquisitions.  Our acquisition pipeline remains robust, and we see continuing opportunities to strengthen our electrical core while broadening our portfolio of products and services.”

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