PITTSBURGH — WESCO International, Inc. (NYSE: WCC), a provider of electrical, industrial, and communications MRO and OEM products, construction materials, and advanced supply chain management and logistics services, announces its 2014 third quarter results on Thursday.
Net sales were $2.078.2 billion for the third quarter of 2014, compared to $1.931.3 billion for the third quarter of 2013, an increase of 7.6 percent. Organic sales increased 6.7 percent, acquisitions positively impacted sales by 1.8 percent, and foreign exchange negatively impacted sales by 0.9 percent. Sequentially, sales increased 3.6 percent, and organic sales increased 3.1 percent.
Gross profit was $422.4 million, or 20.3 percent of sales, for the third quarter of 2014, compared to $395.7 million, or 20.5 percent of sales, for the third quarter of 2013.
Selling, general & administrative (SG&A) expenses were $271.8 million, or 13.1 percent of sales, for the third quarter of 2014, compared to $255.2 million, or 13.2 percent of sales, for the third quarter of 2013.
Operating profit was $133.2 million for the current quarter, compared to $123.7 million for the third quarter of 2013. Operating profit as a percentage of sales was 6.4 percent in 2014 and 2013.
Net income attributable to WESCO International, Inc. of $80.8 million for the current quarter was up 16.9 percent from $69.2 million in the prior year quarter and up 8.2 percent from adjusted net income attributable to WESCO International, Inc. of $74.7 million in the prior year quarter. Prior year quarter adjusted net income attributable to WESCO International, Inc. excludes the impact of the sale of the Company's EECOL Electric Argentina operations and the tax impact of the ArcelorMittal litigation recovery.
Earnings per diluted share for the third quarter of 2014 were $1.52 per share, based on 53.2 million diluted shares, compared to $1.32 per share in the third quarter of 2013, based on 52.5 million diluted shares. Earnings per diluted share in the third quarter of 2014 of $1.52 per share were up 7.0 percent, compared to adjusted earnings per diluted share of $1.42 per share in the corresponding prior year period excluding the impact of non-recurring items.
Free cash flow for the third quarter of 2014 was $84.8 million, or 105 percent of net income, compared to $72.3 million for the third quarter of 2013.
Mr. John J. Engel, WESCO'S Chairman and Chief Executive Officer, stated, "Our third quarter results reflect strong sales execution and continued improvement in our end markets. Organic sales grew 7 percent with growth accelerating through the quarter. Sales were up in all four of our end markets for the second consecutive quarter. Organically, U.S. sales grew 8 percent while Canada sales grew 5 percent. Operating margin expanded to 6.4 percent, increasing 60 basis points sequentially, and reflected good operating cost leverage. Free cash flow was also strong at $85 million or 105 percent of net income. We continue to see favorable momentum in our customer base, including strengthening in non-residential construction, which we expect will result in ongoing growth in our key markets. Based upon our third quarter results, we are narrowing our full year outlook to approximately 5 percent sales growth and $5.25 to $5.35 earnings per diluted share from our previous outlook of 4 percent to 5 percent sales growth and $5.20 to $5.40 earnings per diluted share.
Mr. Engel continued, "Following the organizational changes announced earlier this year to accelerate our One WESCO strategy, we are pleased with the progress we're making to strengthen our business and deliver above-market growth. Our One WESCO value proposition provides customers with the comprehensive product and service solutions they need to meet their MRO, OEM, and capital project management requirements. We remain sharply focused on strengthening that value proposition both organically and through acquisitions. Our acquisition pipeline remains robust, and we continue to see opportunities to enhance our electrical core as well as broaden our portfolio of products and services."
WESCO is No. 5 on Industrial Distribution's 2014 Big 50 List.