Pittsburgh-based electrical and industrial supplies distributor WESCO International reported its 2021 third quarter financial results on Nov. 4, showing record sales and profits for the company that doubled in size with its landmark $4.5 billion acquisition of Anixter International during 2020.
WESCO reported total Q3 sales of $4.73 billion, up 14.1 percent year-over-year and up 2.9 percent from Q2. Third quarter organic sales grew 13.6 percent year-over-year, and grew 3.4 percent from Q2, as the company said all business segments increased sales year-over-year.
WESCO was No. 7 on Industrial Distribution's 2021 Big 50 List, specifically for its sales of industrial products.
The company said backlog at the end of Q3 increased by over 60 percent compared to a year earlier and the end of 2020, while WESCO's book-to-bill ratio ended Q3 above 1.0. Sequentially, backlog grew about 15 percent.
WESCO's Q3 gross profit margin was 21.3 percent, up from 19.0 percent a year earlier. Operating profit of $229.5 million jumped 28.8 percent year-over-year on margin of 4.9 percent, up from 4.3 percent a year earlier.
The company's Q3 net profit of $105 million topped the $66 million of a year earlier and trailed Q2's $119 million.
"Early in the second year of our transformational combination of WESCO and Anixter, the substantial value creation of the new WESCO is building,” said John Engel, WESCO chairman, president and CEO. “Our sales growth accelerated versus 2019 pre-pandemic levels, and our margin performance and backlog achieved new records for the company. We are outperforming the market across our three business units by utilizing our increased scale, expanded portfolio and industry-leading positions."
By WESCO business segment in Q3:
- Electrical & Electronic Solutions (EES) sales of $1.98 billion jumped 19.8 percent year-over-year and topped Q2's $1.92 billion. Q3 organic sales grew 19.0 percent, reflecting double-digit sales growth in WESCO's construction, OEM and industrial businesses due to business expansion, price inflation and the benefits of cross-selling. Operating profit of $155 million increased by $50 million and narrowly topped Q2's $154 million.
- Communications & Security Solutions (CCS) sales of $1.49 billion increased 7.2 percent year-over-year and topped Q2's $1.46 billion. Q3 organic sales grew 6.2 percent, reflecting growth in WESCO's network infrastructure and security solutions business. Operating profit was $108 million, up from $90 million a year earlier and trailing Q2's $113 million.
- Utility & Broadband Solutions (UBS) sales of $1.26 billion increased 14.4 percent year-over-year and topped Q2's $1.21 billion. Q3 organic sales grew 14.8 percent, reflecting broad-based growth in WESCO's utility business, as well as continued strong demand in its broadband and integrated supply business. Operating profit was $108 million, up from $74 million a year earlier and topping Q2's $95 million.
Like it did in its Q2 earnings report, WESCO raised its full-year sales growth expectations. The company now forecasts total 2021 sales growth of 11 to 13 percent, up from 10 to 13 percent issued after Q2 and significantly above the 4.5 to 7.5 percent growth forecasted after Q1.