Core Viewpoint - Pomerantz LLP is investigating potential securities fraud or unlawful business practices involving Watsco, Inc. and its officers or directors following disappointing financial results and a significant stock price drop [1][3]. Financial Performance - Watsco reported first-quarter 2025 revenue of $1.53 billion, which is a 2% decline year-over-year and below consensus estimates [3]. - The company indicated that the results are influenced by a large-scale product transition due to regulatory changes effective January 1, 2025, impacting approximately 55% of its sales and expected to convert nearly $1 billion of inventory throughout the year [3]. - Following the announcement, Watsco's stock price decreased by $56.76 per share, or 11.28%, closing at $446.40 on April 23, 2025 [3]. Legal Investigation - Pomerantz LLP is actively seeking claims from investors regarding potential securities fraud related to Watsco's recent financial disclosures [1]. - The firm has a long history in corporate and securities class litigation, having recovered significant damages for victims of securities fraud and corporate misconduct [4].

NEW YORK, April 25, 2025 (GLOBE NEWSWIRE) -- Pomerantz LLP is investigating claims on behalf of investors of Watsco, Inc. (“Watsco” or the “Company”) (NYSE: WSO). Such investors are advised to contact Danielle Peyton at newaction@pomlaw.com or 646-581-9980, ext. 7980. The investigation concerns whether Watsco and certain of its officers and/or directors have engaged in securities fraud or other unlawful business practices.  [Click here for information about joining the class action] On April 23, 2025, Watsc ...

Watsco, Inc. (WSO) reported first-quarter 2025 results wherein earnings and revenues missed the Zacks Consensus Estimate and declined year over year. Following the results, WSO stock declined 11.3% during trading hours yesterday. Investors' sentiments are likely to have been hurt by a mix of challenges across end markets and seasonal factors. Additionally, uncertainty surrounding the ongoing impacts of tariffs and inflationary pressures weighed on investor outlook. Although Watsco has implemented pricing ac ...

Financial Data and Key Metrics Changes - Watsco reported a strong first quarter with a 10% increase in sales for the core HVAC replacement business driven by higher volumes and a richer mix of high-efficiency systems [6][9] - Gross margins improved following the launch of new systems, with the company aiming for a long-term gross profit margin goal of 30% [34][9] - The company has $430 million in cash, no debt, and over $3 billion in equity, indicating a strong balance sheet [9] Business Line Data and Key Metrics Changes - The core HVAC replacement business saw a 10% increase, while the commercial products segment experienced a decline of around 10% due to the transition from 410A to 454B refrigerants [6][71] - The residential new construction market was noted to be softer year-over-year, but the company believes it has not lost market share in this segment [30][26] Market Data and Key Metrics Changes - Domestic sales accounted for 91% of first-quarter sales, with mid-single-digit growth observed in the domestic market [58] - International sales, which represent 9% of total sales, were noted to be weaker, with greater uncertainty in Canada and Latin America [11] Company Strategy and Development Direction - Watsco is transitioning to the new A2L refrigerant systems, which are expected to impact around 55% of total sales and are seen as beneficial for business in the long term [4][5] - The company emphasizes its scale, technology, and relationships with OEM partners to adapt quickly to changing market conditions [12][11] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the upcoming selling season, expecting benefits from the new A2L products to materialize in the stronger second and third quarters [9][4] - The company is closely monitoring the potential impact of proposed tariffs and is collaborating with OEM partners on pricing actions [11][9] Other Important Information - Watsco raised its annual dividend by 11% to $12 per share, marking the 51st consecutive year of dividend payments [10] - The company is actively training customers and updating technology platforms to support the transition to new refrigerant systems [5] Q&A Session Summary Question: Insights on residential sales growth - Management indicated that most of the first-quarter growth was from 410A, with a transition to A2L products expected in the second quarter [18][19] Question: Impact of price increases on gross margin - Management noted that the first quarter saw clean pricing without significant price increases, with gross margin improvements primarily due to a favorable segment mix [22][21] Question: International sales performance - Management acknowledged that international sales were weak but not significant enough to impact overall performance, attributing some of the softness to fewer selling days in the quarter [27][28] Question: Transition to A2L refrigerants - Management confirmed that there were no significant delays in the transition to A2L products and that the market is adapting well [80][81] Question: Price increase mechanisms - Management clarified that most pricing actions are price increases rather than surcharges, indicating a stable pricing environment [138][135] Question: Supply chain issues with refrigerants - Management acknowledged shortages of 454B refrigerant due to container issues but emphasized that there is no shortage of the refrigerant itself [96][97] Question: Consumer behavior regarding repairs versus replacements - Management indicated that both repair and replacement markets are expected to grow, with a positive outlook on energy-efficient product sales [105][110]

Watsco (WSO) Q1 2025 Earnings Call April 23, 2025 06:32 PM ET Company Participants Albert Nahmad - Chairman & CEOPaul Johnston - Executive Vice PresidentBarry Logan - Executive VP of Planning & Strategy and SecretaryJeffrey Sprague - Founder and Managing PartnerTommy Moll - Managing DirectorAaron Nahmad - PresidentRyan Merkel - Co-Group Head–IndustrialsBrett Linzey - Executive DirectorJeffrey Hammond - Managing DirectorChris Snyder - Executive DirectorRick Gomez - Vice President of Corporate DevelopmentStev ...

Watsco (WSO) reported $1.53 billion in revenue for the quarter ended March 2025, representing a year-over-year decline of 2.2%. EPS of $1.93 for the same period compares to $2.17 a year ago.The reported revenue represents a surprise of -7.62% over the Zacks Consensus Estimate of $1.66 billion. With the consensus EPS estimate being $2.29, the EPS surprise was -15.72%.While investors closely watch year-over-year changes in headline numbers -- revenue and earnings -- and how they compare to Wall Street expecta ...

Over the last four quarters, the company has surpassed consensus EPS estimates just once. Watsco, which belongs to the Zacks Building Products - Air Conditioner and Heating industry, posted revenues of $1.53 billion for the quarter ended March 2025, missing the Zacks Consensus Estimate by 7.62%. This compares to year-ago revenues of $1.57 billion. The company has topped consensus revenue estimates just once over the last four quarters. Watsco (WSO) came out with quarterly earnings of $1.93 per share, missin ...

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Financial Performance - Revenues decreased 2% to $1.53 billion compared to $1.56 billion in the prior year[15] - Net income for Q1 2025 decreased to $94,540 from $104,262 in Q1 2024, representing a decline of approximately 10.5%[30] - Net cash used in operating activities was $(177,644) in Q1 2025, compared to $103,706 in Q1 2024, indicating a significant negative shift[30] Profitability and Margins - Gross profit margin improved by 60 basis points to 28.1% from 27.5% in the previous year[15] Cash Flow and Investments - Operating cash flow was a use of cash totaling $178 million, reflecting inventory investments in new A2L products[12] - Cash flows from investing activities showed a net inflow of $244,556 in Q1 2025, contrasting with a net outflow of $(210,965) in Q1 2024[30] - The company had capital expenditures of $(7,443) in Q1 2025, up from $(5,787) in Q1 2024, indicating increased investment in assets[30] Dividends and Shareholder Returns - Watsco raised its annual dividend by 11% to $12.00 per share effective April 2025[3] - Dividends on Common and Class B Common stock increased to $(109,037) in Q1 2025 from $(96,765) in Q1 2024, reflecting a rise of approximately 12.5%[30] Assets and Equity - Total assets as of March 31, 2025, were $4.45 billion, with shareholders' equity at $3.09 billion[28] - Watsco's strong balance sheet includes $432 million in cash and no outstanding debt[3] Inventory and Working Capital - Accounts receivable increased significantly to $83,864 in Q1 2025 from $(33,502) in Q1 2024, indicating a substantial change in working capital[30] - Inventories net increased to $(389,990) in Q1 2025 from $(307,219) in Q1 2024, showing a rise in inventory levels[30] Market and Sales Growth - Core U.S. market for residential replacement sales increased by 10% (12% on a same-day basis) due to new customer acquisition and improved product mix[6] - Watsco's digital user-community consists of approximately 67,000 contractors and technicians, leading to higher sales growth rates among digital users[4] - The company has acquired 11 companies since 2019, contributing to $1.6 billion in annualized sales[16] Foreign Exchange Impact - The effect of foreign exchange rate changes on cash and cash equivalents resulted in a positive impact of $319 in Q1 2025, compared to a negative impact of $(2,390) in Q1 2024[30] Provisions and Doubtful Accounts - The company reported a provision for doubtful accounts of $840 in Q1 2025, slightly down from $862 in Q1 2024[30] Transition to New Products - The transition to new A2L products affects approximately 55% of Watsco's sales and will convert nearly $1 billion of inventory over the year[5]

MIAMI, April 23, 2025 (GLOBE NEWSWIRE) -- Watsco, Inc. (NYSE:WSO) announced its operating results for the first quarter ended March 31, 2025 and provided commentary on growth opportunities, business trends, its financial position and long-term growth drivers. Watsco is the leading distributor in the HVAC/R marketplace, serving over 375,000 contractors, technicians and installers from 693 locations across the U.S., Canada and Latin America. Since entering distribution in 1989, the Company has scaled to be th ...