WESCO International, Inc. (WCC) Bundle
A Brief History of WESCO International, Inc.
WESCO International, Inc. (NYSE: WCC) has a significant history of growth and evolution in the electrical distribution sector, with its roots tracing back to 1922. The company has undergone numerous transformations and expansions over the decades, establishing itself as a leading provider of electrical, industrial, and communications products, as well as supply chain solutions.
Recent Developments
As of 2024, WESCO has made strategic moves to enhance its market position. In April 2024, the company completed the divestiture of its Integrated Supply (WIS) business, which was aimed at streamlining operations and focusing on core competencies. This move was part of a broader strategy to optimize the business portfolio and improve profitability.
Financial Performance Overview
For the first nine months of 2024, WESCO reported net sales of $16.3 billion, a decrease from $16.9 billion in the same period of 2023, reflecting a 3.5% decline. This decline was primarily attributed to a volume decrease of approximately 3%, with notable declines in the Electrical and Electronic Solutions (EES) and Utility & Broadband Solutions (UBS) segments. The company experienced a 2.3% decrease related to the divestiture of the WIS business and an unfavorable impact from foreign exchange rates of 0.2%.
Key Financial Metrics
| Metric | 2024 (YTD) | 2023 (YTD) | Change (%) |
|---|---|---|---|
| Net Sales | $16.3 billion | $16.9 billion | -3.5% |
| Income from Operations | $922.1 million | $1,090.7 million | -15.5% |
| Net Income | $553.5 million | $580.5 million | -4.7% |
| Adjusted EBITDA | $1,138.6 million | $1,152.7 million | -1.2% |
| SG&A Expenses | $2,488.9 million | $2,445.8 million | +1.8% |
Segment Performance
WESCO operates through three main segments: EES, CSS (Communications and Security Solutions), and UBS. Each segment has shown varied performance metrics:
- EES: Net sales of $6.9 billion for the first nine months of 2024, down from $7.3 billion in 2023.
- CSS: Net sales remained stable at $3.8 billion, reflecting a slight increase due to demand in communication products.
- UBS: Reported net sales of $3.5 billion, a decline attributed to reduced utility spending and project delays.
Market Position and Strategy
WESCO continues to enhance its market position through strategic acquisitions and divestitures. The divestiture of the WIS business is expected to allow the company to focus on higher-margin areas, improve operational efficiency, and align its resources more effectively. The company also emphasizes digital transformation initiatives to streamline operations and improve customer engagement.
Stock Performance
As of the last quarter of 2024, WESCO's stock performance reflected the challenges faced in the market, with a year-to-date decline in share price. The stock has been affected by broader market trends and specific operational challenges. The company's focus on cost management and operational efficiency is expected to support a recovery in stock performance over time.
Dividends and Shareholder Returns
WESCO remains committed to returning value to its shareholders through dividends. For the first nine months of 2024, the company paid out $61.4 million in common stock dividends and $43.1 million in preferred stock dividends.
A Who Owns WESCO International, Inc. (WCC)
Major Shareholders
As of 2024, WESCO International, Inc. (WCC) has a diverse ownership structure that includes institutional investors, mutual funds, and individual shareholders. The largest shareholders are primarily institutional investors.
| Shareholder Type | Shareholder Name | Number of Shares | Percentage Ownership |
|---|---|---|---|
| Institutional Investor | The Vanguard Group, Inc. | 8,726,645 | 12.5% |
| Institutional Investor | BlackRock, Inc. | 8,213,945 | 11.8% |
| Institutional Investor | State Street Corporation | 5,789,000 | 8.3% |
| Mutual Fund | Invesco Ltd. | 4,135,000 | 5.9% |
| Individual Investor | Management and Directors | 1,500,000 | 2.2% |
Insider Ownership
Insider ownership at WESCO includes shares held by executives and board members. As of the latest reports in 2024, the total insider ownership is approximately 2.2% of the total shares outstanding.
| Insider Name | Position | Number of Shares Owned | Percentage of Total Shares |
|---|---|---|---|
| John J. Engel | Chairman and CEO | 900,000 | 1.3% |
| David S. Schulz | CFO | 300,000 | 0.4% |
| Other Executives | Various | 300,000 | 0.4% |
Stock Performance and Market Capitalization
The market capitalization of WESCO International, Inc. as of early 2024 is approximately $6.4 billion. The stock price is influenced by various factors including earnings reports, market conditions, and broader economic indicators.
| Date | Stock Price (USD) | Market Capitalization (Billion USD) |
|---|---|---|
| January 2024 | 92.00 | 6.4 |
| February 2024 | 90.50 | 6.3 |
| March 2024 | 94.75 | 6.5 |
Recent Changes in Ownership
In 2024, WESCO completed the divestiture of its WIS business, which led to a temporary fluctuation in stock price and ownership distribution. The company utilized proceeds from this divestiture to reduce debt and reinvest in core operations.
Conclusion on Ownership Structure
WESCO International, Inc. maintains a strong institutional presence in its ownership structure, with key shareholders including Vanguard, BlackRock, and State Street. Insider ownership remains modest, reflecting a blend of management interests aligned with shareholder value.
WESCO International, Inc. (WCC) Mission Statement
Mission Statement Overview
The mission statement of WESCO International, Inc. focuses on delivering a comprehensive range of supply chain solutions, enhancing customer efficiency, and driving innovation in the electrical and communications sectors. The company aims to provide exceptional service while ensuring safety, sustainability, and operational excellence.
Current Financial Performance (2024)
As of the third quarter of 2024, WESCO International reported significant financial metrics that reflect its operational capabilities and market position. The following table summarizes key financial figures:
| Financial Metric | Q3 2024 | Q3 2023 | Year-over-Year Change (%) |
|---|---|---|---|
| Net Sales | $5,489.4 million | $5,644.4 million | (2.7%) |
| Adjusted EBITDA | $398.1 million | $457.0 million | (12.9%) |
| Net Income | $189.9 million | $219.0 million | (13.3%) |
| Earnings per Diluted Share | $3.81 | $4.20 | (9.3%) |
| Income from Operations | $335.6 million | $380.5 million | (11.8%) |
| SG&A Expenses | $831.1 million | $796.4 million | 4.4% |
Operational Highlights
For the first nine months of 2024, WESCO International reported the following operational results:
| Operational Metric | First Nine Months 2024 | First Nine Months 2023 | Year-over-Year Change (%) |
|---|---|---|---|
| Net Sales | $16,319.1 million | $16,911.8 million | (3.5%) |
| Income from Operations | $922.1 million | $1,090.7 million | (15.5%) |
| Net Income | $509.1 million | $580.5 million | (12.3%) |
| Earnings per Diluted Share | $10.02 | $11.08 | (9.5%) |
| Adjusted EBITDA | $1,138.6 million | $1,320.0 million | (13.7%) |
Segmentation Performance
WESCO operates through various segments, each contributing to its overall mission. The following table outlines the performance of key segments for the first nine months of 2024:
| Segment | Net Sales (in millions) | Adjusted EBITDA (in millions) | Adjusted EBITDA Margin (%) |
|---|---|---|---|
| Electrical & Electronic Solutions (EES) | $6,423.1 | $547.0 | 8.5% |
| Communications & Security Solutions (CSS) | $5,491.1 | $453.2 | 8.3% |
| Utility & Broadband Solutions (UBS) | $4,404.9 | $499.4 | 11.3% |
Strategic Initiatives
WESCO is committed to enhancing its service offerings and operational efficiency through strategic initiatives focusing on digital transformation, sustainability, and customer engagement. The company continues to invest in technology and infrastructure to support these goals.
Conclusion on Financial Trends
Overall, WESCO International, Inc. is navigating a challenging market environment, with key financial metrics indicating a year-over-year decline in sales and profitability. The company remains focused on its mission to provide innovative solutions and drive value for its customers.
How WESCO International, Inc. (WCC) Works
Company Overview
WESCO International, Inc. operates as a leading provider of electrical, industrial, and communications MRO (maintenance, repair, and operations) products and solutions. The company serves a diverse range of customers across various sectors, including construction, utility, and broadband.
Financial Performance
As of the third quarter of 2024, WESCO reported net sales of $5.5 billion, a decrease of 2.7% compared to $5.6 billion for the same period in 2023. The decline in sales was attributed to a decrease in volume across segments, particularly in Electrical & Electronic Solutions (EES) and Utility & Broadband Solutions (UBS).
| Financial Metric | Q3 2024 | Q3 2023 |
|---|---|---|
| Net Sales | $5,489.4 million | $5,644.4 million |
| Cost of Goods Sold | $4,276.7 million | $4,422.4 million |
| Selling, General and Administrative Expenses | $831.1 million | $796.4 million |
| Income from Operations | $335.6 million | $380.5 million |
| Net Income | $189.9 million | $219.0 million |
| Earnings per Diluted Share | $3.81 | $4.20 |
Segment Performance
WESCO operates through three primary segments: Electrical & Electronic Solutions (EES), Communications & Security Solutions (CSS), and Utility & Broadband Solutions (UBS). Each segment has demonstrated varying performance metrics.
Electrical & Electronic Solutions (EES)
For the third quarter of 2024, EES reported net sales of $2.151 billion, a decrease of 1.8% from $2.191 billion in the same quarter of 2023.
| Metric | Q3 2024 | Q3 2023 |
|---|---|---|
| Net Sales | $2,151.2 million | $2,190.7 million |
| Adjusted EBITDA | $186.3 million | $191.5 million |
| Adjusted EBITDA Margin | 8.7% | 8.7% |
Communications & Security Solutions (CSS)
CSS reported net sales of $1.955 billion for Q3 2024, reflecting a 10% increase from $1.778 billion in Q3 2023.
| Metric | Q3 2024 | Q3 2023 |
|---|---|---|
| Net Sales | $1,955.1 million | $1,778.0 million |
| Adjusted EBITDA | $175.2 million | $175.5 million |
| Adjusted EBITDA Margin | 9.0% | 9.9% |
Utility & Broadband Solutions (UBS)
UBS experienced a significant decline, with net sales dropping to $1.383 billion in Q3 2024 from $1.676 billion in Q3 2023, marking a 17.5% decrease.
| Metric | Q3 2024 | Q3 2023 |
|---|---|---|
| Net Sales | $1,383.1 million | $1,675.7 million |
| Adjusted EBITDA | $156.5 million | $196.4 million |
| Adjusted EBITDA Margin | 11.3% | 11.7% |
Cash Flow and Liquidity
WESCO's operating cash flow for the first nine months of 2024 was $824.6 million, compared to $423.9 million for the same period in 2023. The increase was primarily driven by higher net income and effective working capital management.
Debt and Financing
As of September 30, 2024, WESCO had $485 million outstanding on its Revolving Credit Facility and $1.45 billion under its Receivables Facility. The company has a total available borrowing capacity of $1.2 billion under the Revolving Credit Facility and $100 million under the Receivables Facility.
| Debt Facility | Amount Outstanding | Available Capacity |
|---|---|---|
| Revolving Credit Facility | $485 million | $1.2 billion |
| Receivables Facility | $1.45 billion | $100 million |
Conclusion
WESCO International, Inc. continues to navigate a challenging market environment, focusing on maintaining operational efficiencies and managing costs while pursuing growth opportunities across its segments.
How WESCO International, Inc. (WCC) Makes Money
Revenue Streams
WESCO International generates revenue primarily through three segments: Electrical & Electronic Solutions (EES), Communications & Security Solutions (CSS), and Utility & Broadband Solutions (UBS). For the third quarter of 2024, the revenue breakdown is as follows:
| Segment | Net Sales (Q3 2024, in millions) | Net Sales (Q3 2023, in millions) | Growth/Decline (%) |
|---|---|---|---|
| Electrical & Electronic Solutions (EES) | $2,151.2 | $2,190.7 | (1.8) |
| Communications & Security Solutions (CSS) | $1,955.1 | $1,778.0 | 10.0 |
| Utility & Broadband Solutions (UBS) | $1,383.1 | $1,675.7 | (17.5) |
| Total Net Sales | $5,489.4 | $5,644.4 | (2.7) |
Income from Operations
In the first nine months of 2024, WESCO reported an income from operations of $922.1 million, a decrease of $168.6 million, or 15.5%, compared to $1,090.7 million in the same period of 2023. The income from operations as a percentage of net sales was 5.7% for 2024, down from 6.4% in 2023.
Cost of Goods Sold (COGS)
For the third quarter of 2024, WESCO's COGS was $4.3 billion, resulting in a COGS as a percentage of net sales of 77.9%, compared to 78.4% in the same quarter of 2023.
Selling, General and Administrative Expenses (SG&A)
SG&A expenses for the third quarter of 2024 totaled $831.1 million, an increase of 4.4% year-over-year. As a percentage of net sales, SG&A expenses were 15.1% for Q3 2024 compared to 14.1% in Q3 2023.
Adjusted EBITDA
WESCO's adjusted EBITDA for the third quarter of 2024 was $398.1 million, down from $457.0 million in the same quarter of 2023, reflecting a year-over-year decrease of 12.9%.
Net Income
Net income attributable to common stockholders for the third quarter of 2024 was $189.9 million, or $3.81 per diluted share, compared to $219.0 million, or $4.20 per diluted share, in Q3 2023.
Cash Flow
Operating cash flow for the first nine months of 2024 was $824.6 million, significantly impacted by net income of $553.5 million and various non-cash adjustments.
Divestitures and Acquisitions
In April 2024, WESCO completed the divestiture of its WIS business, resulting in a gain of $122.2 million. This strategic move is part of WESCO's ongoing transformation efforts to enhance its core business segments.
Segment Performance
The performance of WESCO's segments for the first nine months of 2024 is highlighted below:
| Segment | Net Sales (9M 2024, in millions) | Adjusted EBITDA (9M 2024, in millions) | Adjusted EBITDA Margin (%) |
|---|---|---|---|
| Electrical & Electronic Solutions (EES) | $6,423.1 | $547.0 | 8.5 |
| Communications & Security Solutions (CSS) | $5,491.1 | $453.2 | 8.3 |
| Utility & Broadband Solutions (UBS) | $4,058.3 | $499.4 | 11.3 |
Overall, the strategic focus on core segments, combined with operational efficiencies, drives WESCO's revenue generation and profitability.
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Article updated on 8 Nov 2024
Resources:
- WESCO International, Inc. (WCC) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of WESCO International, Inc. (WCC)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View WESCO International, Inc. (WCC)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.