WESCO International (WCC), a leading supplier of electrical, industrial and communications products, has recorded a 5.51 percent increase in profit for the quarter ended Jun. 30, 2014.
The company earned $68.90 million or $1.29 a share in the second-quarter compared with $65.30 million or $1.25 a share a year ago. Analysts on average had predicted net income of $1.35 a share.
Revenue during the second-quarter grew 5.87 percent to $2005.20 million from $1,894 million in the last year period.
Gross margin contracted by 19 basis points over the previous year period to 20.54 percent. Total expenses as a percentage of revenues increased to 94.22 percent from 94.20 percent in the same period last year. That has resulted in contraction of 2 basis points in operating margins to 5.78 percent.
The company disclosed operating income of $115.90 million, compared with operating income of $109.90 million in the last year period.
John J. Engel, WESCO's chairman and chief executive officer, stated, ''Our second quarter results reflect strong sales execution, along with improvement in our end markets and seasonal recovery from the severe winter weather conditions experienced earlier this year. Sales grew 6% organically, with growth in all four of our end markets. Sales in the U.S. were up 5%, sales in Canada were up 7% on a local currency basis, and sales for the rest of world were up over 13%.
Sales growth in the U.S. was steady in the quarter at mid-single-digit rates while sales momentum in Canada accelerated through the quarter. July is off to a good start with sales growth rates trending in-line with second quarter levels. We continue to see favorable indicators with our customers, including further strengthening in non-residential construction, which we expect will result in ongoing growth in our key markets. With the improving sales momentum but a softer than anticipated start to the year, we are revising our full year outlook to 4% to 5% sales growth and $5.20 to $5.40 earnings per diluted share from our previous outlook of 3% to 6% sales growth and $5.30 to $5.70 earnings per diluted share.''
Cash Flow
WESCO International has generated cash of $50.80 million from operating activities during the first half, down 57.60 percent or $69 million when compared with the last year period.
The company has spent $145.10 million cash to meet investing activities during the first half, as against cash outgo of $2.10 million in the last year period.
The company has generated net cash of $75.40 million from financing activities during the first half, as against cash outgo of $97.90 million in the last year period. It has borrowed net of $76.30 million through debt during the first half. It has spent net of $0.40 million on repurchase of common stocks.
As on Jun. 30, 2014, the company's cash balance stood at $101.60 million, down 2.79 percent or $2.91 million from Jun. 30, 2013.
Working Capital
WESCO International has witnessed an increase in the working capital over the last one year. The company's working capital stood at $1294.30 million as at Jun. 30, 2014, up $140.66 million or 12.19 percent from $1153.64 million on Jun. 30, 2013. It registered an increase in current ratio to 2.16 as at Jun. 30, 2014 from 2.11 on Jun. 30, 2013.
Debt Position
WESCO International has witnessed a decline in the total debt over the last one year. As on Jun. 30, 2014, total debt stood at $1568.40 million, down 2.94 percent or $47.49 million, from Jun. 30, 2013.
The company's total debt was 31.82 percent of total assets as on Jun. 30, 2014, compared with 34.86 percent on Jun. 30, 2013. It has witnessed a decline in debt to equity ratio to 0.83 on Jun. 30, 2014 compared with 0.98 on Jun. 30, 2013.
Shares of Wesco International declined $2.06 or 2.44 percent to trade at $82.26 on Thursday (9:51AM).
