Heating, ventilation, air conditioning and refrigeration equipment distributor Watsco on Tuesday reported record results for its latest fiscal quarter.
The Miami company said second-quarter sales eclipsed $2.1 billion, a 15% increase from the $1.84 billion reported in the same period last year. Operating income rose from $5.53 million to $6.31 million over that span, while gross profits jumped from $478 million to $596 million, an increase of 25%.
Earnings per share increased 33% to a record $4.93.
HVAC equipment, which accounted for 70% of Watsco’s overall sales, saw a 13% increase in sales in the latest quarter. Commercial refrigeration products, which accounted for just 4% of sales, saw a 26% jump. Other HVAC product sales rose 15%.
Watsco Chairman and CEO Albert Nahmad said the record quarter was particularly impressive given the “exceptional performance” in the previous April-June window. The company said it has benefited from strong demand since 2020 and that rising prices — a response to underlying inflation by its suppliers and OEMs — bolstered its sales and profit numbers.
Although recent efforts to curb inflation are expected to hinder those trends moving into 2023, Watsco said its “unique fundamentals” and “upcoming industry changes” would still provide opportunities for growth.
“We are encouraged by current trends even as end markets return to more historical levels of demand,” Nahmad said in a statement. “While inflation generally benefits distribution models, Watsco’s performance is also a result of intentional investments in technology and other tools to capture more growth and operate a more profitable business going forward.”
