Core Viewpoint - WESCO International (WCC) reported a decline in adjusted earnings and net sales for Q1 2025, but showed positive organic sales growth, particularly in the CSS segment, which contributed to a slight increase in share price in pre-market trading [1][2]. Financial Performance - Adjusted earnings for Q1 2025 were $2.21 per share, down 3.9% year over year, missing the Zacks Consensus Estimate by 0.90% [1]. - Net sales were $5.34 billion, a slight decrease of 0.1% year over year, but exceeded the Zacks Consensus Estimate by 2.10% [1]. - Organic sales increased by 5.6% year over year [1]. Segment Performance - EES Segment (38.6% of Net Sales): Sales were $2.07 billion, flat year over year, with organic sales rising 3.4% due to OEM growth [3]. - CSS Segment (37.4% of Net Sales): Sales increased by 17.3% year over year to $2 billion, with organic sales up 18.1%, driven by a 65% surge in Wesco Data Center Solutions [4]. - UBS Segment (23.9% of Net Sales): Sales decreased by 19.2% year over year to $1.28 billion, with organic sales down 4.9%, primarily due to weakness in the utility business [5]. Margin Analysis - Gross margin for Q1 2025 was 21.1%, a contraction of 20 basis points year over year, influenced by lower margins in CSS and EES segments [6]. - Adjusted EBITDA margin declined to 5.8%, down 50 basis points year over year [6]. - Selling, general and administrative expenses rose to $829 million, up 2.3% year over year, with the adjusted operating margin contracting to 4.6% [7]. Balance Sheet & Cash Flow - As of March 31, 2025, cash and cash equivalents were $681.6 million, down from $702.6 million at the end of 2024 [8]. - Long-term debt increased to $5.14 billion from $5.05 billion in the previous quarter [8]. - Cash generated from operations was $28 million, significantly lower than $276.6 million in the previous quarter, with free cash flow reported at $9.4 million compared to $268.4 million previously [8]. 2025 Financial Outlook - WESCO maintains its 2025 outlook, expecting organic sales growth between 2.5% and 6.5%, with reported sales projected to be between $21.8 billion and $22.7 billion [10]. - Adjusted EBITDA margin is anticipated to be between 6.7% and 7.2%, with adjusted diluted EPS expected between $12 and $14.50 per share [11]. - Free cash flow is projected to be between $600 million and $800 million [11].