Communications-Tech Firm Wesco Slumps on Earnings Miss

Wesco, the provider of communications technology, reported earnings that missed Wall Street's estimates. The stock is lower.
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Wesco WCC shares slumped on Tuesday after the communications-technology provider reported fourth-quarter earnings below analyst estimates while revenue beat expectations. 

The Pittsburgh company earned an adjusted $1.22 a share. Analysts surveyed by FactSet were expecting $1.32. Revenue of $4.13 billion exceeded the FactSet call for $4.12 billion. 

"For 2021, Wesco is exceptionally well positioned to support our customers with an expanded set of products and differentiated services," Chief Executive John Engel said in a statement. 

"The efficiencies we capture through our larger scale will combine with growth in electrification, automation, communications and security across our three global business units to drive our performance this year."

Wesco shares at last check were down 15% to $75.62. 

In January, Wesco completed its merger with communications and security products distributor Anixter for $100 a share. The deal valued Anixter at $4.5 billion including debt. 

The two sides first unveiled the deal six months prior, before Anixter agreed to a rival bid from the New York private-equity firm Clayton, Dubilier & Rice for $93.50 a share. Anixter called Wesco's bid superior to that agreement. 

The company said it had been able to reduce net debt by $389 million in the six months since completing the merger. 

Wesco sees the combination exceeding the internal synergy targets its has in place for its three-year plan.

"The combination of Wesco and Anixter creates cross-selling opportunities, with initiatives underway that have already delivered early successes," Engel said.

"We enter 2021 with a record backlog, a new organizational structure, and the strongest management team we’ve fielded during my time with the company."