Wesco International ((WCC)) has held its Q3 earnings call. Read on for the main highlights of the call.
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WESCO International’s latest earnings call painted a picture of robust growth and optimism, despite facing certain challenges. The company reported strong sales growth across its segments, particularly in data centers, and improved earnings per share. However, challenges remain in the utility segment and a reduced free cash flow outlook. Despite these hurdles, the company’s positive outlook and raised guidance suggest an overall strong performance.
Record Sales Growth
WESCO achieved an all-time record for quarterly sales at $6.2 billion, with organic sales growth of 12% in Q3. This marks the fourth consecutive quarter of accelerating momentum, showcasing the company’s ability to maintain strong growth trajectories.
Data Center Segment Surge
The data center segment was a standout performer, with sales setting another quarterly record at $1.2 billion, up 60% year-over-year. This impressive growth now represents 19% of total company sales, with trailing 12-month data center sales nearing $4 billion.
Improved Earnings per Share
WESCO’s adjusted earnings per share grew by 9.5% year-over-year and 16% sequentially. This improvement was driven by enhanced operating performance, reflecting the company’s effective management strategies.
Raised Full Year Outlook
In light of increased business momentum, WESCO raised its full-year outlook for organic sales growth to 8-9%, along with adjustments to EBITDA and EPS. This upward revision underscores the company’s confidence in its growth trajectory.
Reduced Free Cash Flow Outlook
Despite the positive sales growth, WESCO reduced its full-year free cash flow outlook. This adjustment is attributed to increased working capital requirements, which are necessary to support rising demand and sales growth rates.
Utility Segment Challenges
The utility segment continues to face challenges, with public power softness and competitive pressures leading to lower gross margins. This remains a key area of concern for the company.
Gross Margin Contraction
WESCO experienced a gross margin contraction of 80 basis points to 21.3% year-over-year. This reflects ongoing project and product mix dynamics that the company is navigating.
Forward-Looking Guidance
WESCO’s forward-looking guidance remains optimistic, with significant growth reported across various metrics. The company anticipates continued strong performance into 2026, driven by secular growth trends in digitalization, electrification, and supply chain resiliency. Despite lowering its free cash flow outlook, WESCO’s raised expectations for organic sales growth, adjusted EBITDA, and EPS highlight a positive future outlook.
In summary, WESCO International’s earnings call reflects a strong performance with record sales and improved earnings, despite challenges in specific segments. The company’s raised guidance and positive outlook suggest continued growth and resilience, making it a company to watch in the coming years.