It was the first full quarter with newly-acquired Anixter, which also nearly doubled WESCO's operating profit.
WESCO International reported its 2020 third quarter financial results on Thursday, recapping the first full quarter that included the results of recently acquired Anixter International. And as Anixter was roughly the same size as WESCO prior to the merger, revenue-wise, it likewise spiked the latter's Q3 sales figures.
Pittsburgh-based WESCO reported Q3 total sales of $4.14 billion, up 92.8 percent year-over-year (YoY). In Q2, WESCO's sales of $2.1 billion included only the tail end of Anixter's impact. Likewise, Q3 cost of goods doubled YoY to $3.4 billion, while gross profit of $785.5 million nearly doubled from $400.2 million, with a Q3 margin of 19.0 percent. SG&A expenses also nearly doubled YoY to $562 million.
WESCO's Q3 operating profit was $178 million, nearly doubling its $94 million from a year earlier, while margin dipped 10 basis points to 4.3 percent. Q3 net profit of $66 million was up slightly from $64.5 million of a year earlier, while operating cash flow nearly doubled YoY to $286 million.
The company identified three new business segments for financial reporting following the completed Anixter deal, valued at $4.5 billion: Electrical & Electronic Solutions (EES), Communications & Security Solutions (CSS) and Utility & Broadband Solutions (UBS).
By WESCO business segment in Q3:
--EES sales of $1.7 billion increased 32.3 percent YoY, while operating profit of $105.5 million improved $33.5 million. Before Q3, Industrial was one of WESCO's then-four business reporting segments. It appears Industrial has now been absorbed into the company's EES segment — where Industrial/MRO comprised about one-third of sales.
--CCS sales of $1.4 billion jumped nearly five-fold at a 489 percent YoY increase, while operating profit of $90 million dwarfed the $11 million from a year earlier.
--UBS sales of $1.1 billion increased 66 percent YoY, while operating profit of $74 million increased $30 million from a year earlier.
"WESCO’s new era is off to an exceptional start," said John Engel, WESCO chairman, president and CEO. "As the premier electrical, communications and utility distribution and --supply chain solutions company in the world, we are very well positioned to capitalize on the accelerating secular trends of electrification, increased bandwidth demand driven by higher voice, data, video and mobile usage, and the digitization of our B2B value chain. Building on our positive momentum, we are looking forward to entering 2021 with accelerating results."
Source: Industrial Distribution