Wesco International Stock Earnings Reports

WESCO reported a very strong Q3 with accelerating sales momentum—organic sales +12% (vs. +6%/+7% in Q1/Q2) and record quarterly revenue of $6.2 billion. Growth was broad-based: Communications & Security Solutions (CSS) +18% organic, Electrical & Electronic Solutions (EES) +12%, and Utility & Broadband Solutions (UBS) +3%. Data center-related sales were a major driver, up ~60% YoY to ~$1.2 billion (≈19% of Q3 sales; ~ $4B TTM), and management expects continued strength into 2026. Adjusted EPS rose 9.5% YoY; adjusted EBITDA margin was 6.8% (down 50 bps YoY but up 10 bps sequentially) and gross margin improved sequentially. Management raised 2025 guidance: organic sales now expected +8% to +9% (from 5–7%), adjusted EPS range to $13.10–$13.60 (midpoint +$0.10), and higher adjusted EBITDA expectations. Free cash flow guidance was reduced to $400–$500M to reflect a working-capital headwind driven by unusually strong AR growth in the quarter (Q3 FCF was a use of $89M, largely from a $270M AR increase). The company completed capital-structure improvement by redeeming its 10.5% preferred stock (benefit ≈ $32M or $0.65 per share annually) and extended debt maturities. Key risks and watch items for investors: rising supplier price notifications/tariff dynamics (pricing benefit in Q3 was <3%, but notifications are up), the near-term working-capital draw (AR), and margin mix effects from large data-center projects. Management reiterated midterm targets for 2026 as an appropriate starting point (mid-single-digit organic growth and 20–30 bps annual adjusted EBITDA margin improvement), with continued focus on cross-sell, margin programs and digital transformation.