WESCO International (NYSE:WCC) Q3 Earnings: What Can You Expect?

in EARNINGS/INVESTING IDEAS by

WESCO International, Inc. (NYSE:WCC) is scheduled to report Q3 earnings results on November 5, 2020.

The company is expected to report earnings of $1.34/share on revenue of $4.052 billion. The consensus earnings per share (EPS) of $1.34/share is based on a poll of 13 analysts and represents a decline in eps of −11.7% over the same quarter last year, when the company reported earnings of $1.52/share.

The revenue forecast of $4.052 billion based on a poll of 11 analysts implies a year-over-year (YoY) growth in revenue of 88.6%. Last year the company reported $2.148 billion in revenue for the quarter.

Expected to report EPS contraction of −11.7% for Q3, 2020
Metric Expected Prior Year YoY Change
Revenue $4,052.37 $2,148.11 88.6%
EPS $1.34 $1.52 −11.7%

Earnings Call Trends

Historically, management has exceeded analyst expectations 5 out of the last 8 tracked quarters, and missed expectations 3 quarters.

What are your expectations from WESCO International, Inc. for earnings this quarter? Let us know in the comments!

Analyst Expected vs. Reported EPS
Quarter Expected Reported Surprise Result
Q2, 2020 $0.62 $1.36 117.8% Beat
Q1, 2020 $0.94 $0.91 −3.5% Missed
Q4, 2019 $1.34 $1.32 −1.2% Missed
Q3, 2019 $1.45 $1.52 4.8% Beat
Q2, 2019 $1.43 $1.45 1.4% Beat
Q1, 2019 $0.96 $0.93 −3.1% Missed
Q4, 2018 $1.25 $1.26 1.0% Beat
Q3, 2018 $1.36 $1.41 3.7% Beat

In the following table, we summarize the company’s stock price movements after earnings releases. The “Price Day Prior” column shows the closing stock price on the day before the earnings report, and the “Price Next Day” column shows the stock price at the end of the trading day after the earnings report. After the last earnings report for the period ending June 30, 2020, the stock price reacted by increasing 7.9%.

Stock Price Performance After Earnings
Report Date Price Day Prior Price Next Day Change % Result
August 13, 2020 $43.90 $47.36 7.9% Increase
April 30, 2020 $29.12 $26.95 −7.5% Decline
January 30, 2020 $52.62 $48.41 −8.0% Decline
October 31, 2019 $50.77 $54.24 6.8% Increase

The other question to consider is one of earnings manipulation. There is a lot of pressure on management each quarter to deliver on earnings expectations. The Beneish M-Score is a statistical model that provides some insight into whether the company might be manipulating earnings. With a Beneish M-Score of −1.73, the model suggests that the company is likely an earnings manipulator. A value of −1.73 implies a 4.2% chance of earnings manipulation.

Fundamentals And Technical Analysis

WESCO International, Inc. is currently trading at $40.10/share, down −4.3% for the day. The company is trading at approximately 66.4% of its 52-week high of $61.32/share. The company’s stock price is down −15.3% since the last earnings report and down −10.2% over the previous week. The company’s 14 Day Relative Price Index (RSI) of 36.36 suggests the company is trading in technically neutral territory. The RSI is considered overbought when above 70 and oversold when below 30.


NYSE:WCC Stock Price Chart
Source: Finbox

The current share price implies a price-to-earnings (P/E) multiple of 17.26 and a forward P/E multiple of 9.31.

WESCO International, Inc.’s current share price also implies a price-to-book (P/B) multiple of 0.65. The following table summarizes some other key fundamental ratios:

Data as of October 28, 2020
Metric Value
Last Reported Fiscal Period Key FY2020.Q2
Period End Date June 30, 2020
Stock Price (Current) $40.10
P/E Ratio 17.3x
P/E Ratio (Fwd) 9.3x
PEG Ratio −0.4
Total Debt / Total Capital 72.6%
Levered Free Cash Flow $316 million
EV / EBITDA 18.5x

Finbox

WESCO International, Inc. is a mid-cap stock with a market capitalization of $2.097 billion and a total enterprise value of $7.351 billion. The company operates in the Industrials sector and the Trading Companies & Distributors industry.

WESCO International, Inc. distributes electrical, industrial, and communications maintenance, repair, and operating (MRO) and original equipment manufacturers products and construction materials in North America and internationally. The company sells general supplies, such as wiring devices, fuses, terminals, connectors, boxes, enclosures, fittings, lugs, terminations, wraps, splicing and marking equipment, tools and testers, safety, personal protection, sealants, cutting tools, adhesives, consumables, fasteners, janitorial, and other MRO supplies; communication and metering devices, and racking systems; and solar modules, connectors, and storage batteries. It also distributes wires, cables, raceways, metallic and non-metallic conduits, and coupling and fittings; and communications and security products, including structured cabling systems, broadband products, low voltage specialty systems, specialty wire and cable products, equipment racks and cabinets, access controls, alarms, cameras, and paging and voice solutions. In addition, the company sells electrical distribution and controls comprising circuit breakers, transformers, switchboards, panel boards, metering products, and busway products; lamps, fixtures, ballasts, and lighting control products; and motor control devices, drives, relays, timers, pushbuttons, operator interfaces, switches, interconnects, programmable controllers, industrial computers and network, and surge and power protection products. Further, it provides supply chain management and logistics services; and value-added services in the areas of construction, e-commerce, energy and sustainability, engineering, production support, safety and security, supply chain optimization, training, and working capital. It serves industrial firms, electrical and data communications contractors, utilities, commercial organizations, institutions, and governmental entities. The company was founded in 1922 and is headquartered in Pittsburgh, Pennsylvania.

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