This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Watsco Delivers 17% EPS Growth And Record Cash Flow In Third Quarter

Stocks in this article: WSO

Watsco, Inc. (NYSE:WSO)(Paris: WSO) today reported record results for the third quarter and nine months ended September 30, 2012.

Third Quarter Results

Earnings per share increased 17% to a record $1.19 per diluted share on record net income of $41 million, compared to $1.02 per diluted share on net income of $34 million in 2011. Operating income increased 15% to a record $86 million with operating margin expanding 30 basis-points to 8.4%. Same-store operating income increased 3% to $76 million with a 20 basis-point improvement in operating margin to 8.3%.

Revenues increased 12% to a record $1.02 billion, including $103 million of sales added by new locations. Same-store sales increased 1%, reflecting a 1% increase in air conditioning and heating (HVAC) equipment (63% of sales), a 4% decrease in other HVAC products (33% of sales) and a 16% increase in commercial refrigeration products (4% of sales).

Gross profit increased 11% to a record $243 million with gross margin declining 20 basis-points to 23.8%. On a same-store basis, gross profit decreased by 2% with gross profit margin declining 50 basis-points to 23.5%. Selling, general and administrative (SG&A) expenses increased 8% to $157 million and as a percentage of sales improved 50 basis-points to a record low of 15.4%. SG&A excluding new locations decreased 4% for the quarter and as a percentage of sales decreased 70 basis-points to a record low of 15.2%.

Albert Nahmad, Watsco’s Chairman and President, said: “Watsco achieved solid earnings growth in the face of a tough economic environment. Growth in international markets and improved operating efficiency combined to produce higher operating margins. We also added value from our increased ownership of Carrier Enterprise LLC. We generated the highest level of cash flow for any quarter in our history, which is a testimony to our business model and focus on delivering both earnings growth and cash flow. We continue to see progress in our basic strategies of growing share of market, enhancing our customer experience, driving improvements to operations and increasing our product and geographic reach.”

1 of 5

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!

Markets

DOW 17,804.80 +26.65 0.15%
S&P 500 2,070.65 +9.42 0.46%
NASDAQ 4,765.38 +16.9840 0.36%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs