PITTSBURGH (AP) — Shares of Wesco International jumped 10 percent before the markets opened Thursday after the company edged out profit expectations for the third quarter and announced the acquisition of a Canadian electrical supply company.
Shares of the Pittsburgh company, which manufactures electrical and industrial maintenance supplies and construction materials, rose $5.83, or 10.2 percent, to $63 in premarket trading Thursday.
Wesco's third-quarter net income rose 17.6 percent on a modest revenue increase due largely to acquisitions. The company also announced a deal to acquire EECOL Electric Corp. of Calgary, Alberta, for about $1.16 billion.
Wesco reported net income of $63.4 million, or $1.25 per share, in the quarter that ended Sept. 30. That compared with net income of $53.9 million, or 1.11 cents per share, a year earlier. Revenue rose 4.8 percent to $1.66 billion, from $1.58 billion.
The earnings performance beat Wall Street's expectations. Analysts surveyed by FactSet predicted earnings of $1.24 per share on revenue of $1.73 billion.
Wesco International Inc. completed acquisitions of Trydor Industries and Conney Safety during the quarter, adding to its portfolio of products and services. Trydor supplies Canadian utilities and power producers with electrical products and services, while the Madison, Wis.-based Conney distributes safety products.
Wesco's operating margin, or profit as a percentage of revenue, was 6.2 percent, the highest level since the 2008 economic downturn, Wesco said.
Wesco said it will finance the EECOL acquisition with a new term loan. The company expects the deal to close in the fourth quarter. EECOL, founded in 1919, distributes electrical equipment and services to more than 20,000 customers across Canada and South America. Its annual revenue is about $919 million (US), Wesco said in a statement.
The company's shares have traded from $41 to $68.19 in the past year.
