WESCO’s Q1 organic growth: 8.2%

WESCO posted its quarterly financial update early this morning. The company noted a 12.2% increase in net sales, at $1.6 billion. After subtracting acquisitions and other details, the company said its “normalized organic growth rate” was roughly 8.2% in the 91-day period.

Going by the company’s news release and its supplemental information, some highlights are listed below:

Above: Slide from WESCO’s presentation in its Q1/12 earnings call with analysts.

  • WESCO’s gross margin came in at 19.9% for the quarter, a hair below the company’s goal.
  • Organic sales had grown at double-digit rates for five straight quarters, a string now broken. Still, WESCO’s organic growth has been at double-digits for seven of the past nine quarters.
  • “Management Estimated Price Impact,” which had been put at 2.0% to 3.5% in each of the previous nine quarters starting with Q2/10, was put at 1.5% for Q1/12.
  • The best performing end market was Utility, with sales up 23.9% in Q1/12 compared to Q1/11.
  • As noted previously, WESCO’s leverage is at the low end of its “target range” (see slide below). The company’s comfort with higher leverage means it could easily make an acquisition of significant size.

John Engel, chairman and CEO, said his company would “continue to execute our One WESCO growth strategy, which targets the countless customer service opportunities within our large, fragmented end markets.”

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