WESCO International(US:WCC) ZACKS·2025-11-04 04:59Core Insights - WESCO International (WCC) shares increased approximately 3% following strong Q3 2025 results, with adjusted earnings of $3.92 per share, reflecting a 9.5% year-over-year growth and surpassing Zacks Consensus Estimate by 4.53% [1] - Net sales reached $6.2 billion, marking a 13% year-over-year increase and exceeding Zacks Consensus Estimate by 5.17% [1] - Organic sales grew by 2.4% year over year [1] Segment Performance - EES Segment (38.1% of Net Sales): Sales were $2.36 billion, up 11.8% year over year, with organic sales increasing by 11.9% [2] - CSS Segment (38.9% of Net Sales): Sales reached $2.41 billion, a 20.8% year-over-year increase, with organic sales up 18.3% [3] - UBS Segment (23% of Net Sales): Sales totaled $1.43 billion, reflecting a 3.3% year-over-year increase, with organic sales rising by 3.4% [3] Operating Metrics - Q3 2025 gross margin was 21.3%, down 80 basis points year over year [4] - Adjusted EBITDA margin decreased to 6%, down 100 basis points year over year [4] - Selling, general and administrative expenses were $914.1 million, up 10.8% year over year, but as a percentage of net sales, it decreased by 30 basis points to 14.7% [4] - Adjusted operating margin contracted to 5.7%, down 50 basis points year over year [4] Financial Position - As of September 30, 2025, cash and cash equivalents were $571.9 million, down from $667 million as of June 30, 2025 [5] - Long-term debt increased to $5.72 billion from $5.64 billion in the previous quarter [5] - Net cash used in operating activities for Q3 2025 was $82.7 million [5] Future Outlook - For 2025, WESCO anticipates organic sales growth between 8% and 9%, with reported sales expected to be between $21.8 billion and $22.7 billion [6] - The adjusted EBITDA margin is projected to be 6.6%, with adjusted earnings expected to range from $13.10 to $13.60 per share [6] - Free cash flow is anticipated to be between $400 million and $500 million [8] - For Q4 2025, reported sales are expected to increase in the high single-digit range, with adjusted EBITDA expected to rise by approximately 30 basis points [8]