Pittsburgh-based electrical and industrial supplies distributor WESCO International reported its 2021 second quarter financial results on Thursday, marking a full fiscal year since the company's landmark $4.5 billion acquisition of Anixter International that completed in June 2020.
That acquisition more doubled WESCO's year-over-year sales (+119 percent), cost of goods and operating profit, but keep in mind that sequential sales would be a much more reliable barometer of the company's actual performance for this past quarter, summarized below.
WESCO reported total Q2 sales of $4.60 billion, up from $2.09 billion of a year earlier and up 13.9 percent from Q1. On a pro format basis, sales were up 24 percent year-over-year. The company's Q2 operating profit $219 million dwarfed the $15 million from a year earlier and significantly topped Q1's $133 million. WESCO's Q2 net profit of $119 million, compared to a $34 million loss a year earlier and $59 million in Q1.
WESCO's Q2 gross margin of 21.0 percent grew 210 basis points year-over-year and 90 points sequentially.
"We’re capitalizing on our scale and leading industry positions, while generating significant integration synergies at a pace exceeding our initial expectations," said John Engel, WESCO chairman, president and CEO. "Our margin performance and backlog are records for the company. And we are de-levering our balance sheet at a rapid rate. We are still in the early stages of unlocking the power and performance of this new WESCO."
WESCO significantly raised its full-year sales growth expectations compared to what it did in its Q1 report, up from 4.5 to 7.5 percent to now forecasting 10 to 13 percent growth.
By WESCO business segment in Q2:
- Electrical & Electronic Solutions (EES) sales of $1.92 billion increased 84.3 percent year-over-year and topped Q1's $1.72 billion. Operating profit of $154 million dwarfed the $46 million from a year earlier and topped Q1's $100 million. WESCO said that activity in industrial/MRO — which was its own reporting segment through Q3 of last year and has since been absorbed into EES — is gaining momentum, along with OEM and commercial, institutional and government.
- Communications & Security Solutions (CCS) sales of $1.46 billion surged 327.9 percent year-over-year and topped Q1's $1.30 billion. Operating profit of $113 million dwarfed the $28 million from a year earlier and topped Q1's $87 million.
- Utility & Broadband Solutions (UBS) sales of $1.21 billion jumped 72.6 percent year-over-year and topped Q1's $1.07 billion. Operating profit of $95 million nearly doubled the $52 million of a year earlier and topped Q1's $87 million.
"We are seeing accelerating sales and margin momentum in each of our strategic business units driven by three factors: the continuing economic recovery, our significantly increased scale, and our mix-shift into higher growth markets," Engel said. "At the same time, we are executing our extensive and comprehensive integration program at a pace and scale that is exceeding our initial expectations."