WESCO International Inc. WCC recently reaffirmed the 2015 earnings per share (EPS) and sales outlook and issued the guidance for 2016.
WESCO international’s shares went up $1.68 or 4.08% to $42.90 following the developments.
For full-year 2015, the company expects sales to decline 4% to 5%, EPS in the range of $5.25–$5.35 and free cash flow generation of approximately 100% of net income.
WESCO anticipates weak demand from builders, manufacturers and other industrial customers this year. The company also stated that profits would remain under pressure throughout the next year due to foreign exchange headwinds.
Therefore, for fiscal 2016, the company predicts sales in the range of flat to down 5%, while EPS with the $3.75 to $4.20 range. The company estimates free cash flow to be roughly 90% of net income. The current Zacks Consensus Estimate for EPS stands at $4.29 for fiscal 2015, higher than the company’s guidance at the mid-point.
WESCO is one of the largest suppliers and distributors of electrical construction products in the U.S. The company is quite active on the merger and acquisition front. Last month, the company announced the acquisition of Needham Electric Supply for an undisclosed amount. The buyout will boost WESCO’s electrical and construction business, in turn, increasing its market traction.
The free cash flow generation ability of its business supports sustained investment in growth initiatives, including acquisitions, while also returning capital to shareholders.
WESCO International currently has a Zacks Rank #3 (Hold).
Key Picks in the Sector
Some better-ranked technology stocks in the same space are Mercadolibre, Inc. MELI, Stamps.com Inc. STMP and Avnet, Inc. AVT. While Mercadolibre and Stamps.com sport a Zacks Rank #1 (Strong Buy), Avnet, carries a Zacks Rank #2 (Buy).
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