Watsco Shares Gain After Strong Q2 Results

  • Watsco Inc WSO reported second-quarter FY21 net revenue growth of 36.5% year-on-year to $1.85 billion, beating the analyst consensus of $1.67 billion.
  • EPS of $3.71 beat the analyst consensus of $3.00.
  • Heating, ventilation, and air conditioning (HVAC) sales grew 23% Y/Y.
  • Gross profit rose 50% Y/Y to $478 million, and the gross margin increased 220 basis points Y/Y to 25.8%.
  • Selling, general and administrative expenses rose 37.4% to $266.7 million.
  • The operating margin expanded 220 basis points to 11.7%, and the operating income for the quarter rose 68% Y/Y to $217 million.
  • Cash and equivalents totaled $96.8 million as of June 30, 2021.
  • Operating cash flow for H1 of 2021 was $82 million, versus $261 million last year. The company has targeted operating cash flow to exceed net income in 2021.
  • Price action: WSO shares are trading higher by 2.00% at $287.16 on the last check Thursday.
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