Distributor of air conditioning products Watsco, Inc. (WSO)Thursday announced second-quarter financial results, reporting a decrease in earnings, negatively impacted by lower demand as well as pricing for its certain commodity products. Gross margin as well as revenues for the quarter also declined.
Coconut Grove, Florida-based Watsco's net income for the second quarter declined to $16.282 million or $0.56 per share from $26.050 million or $0.90 per share in the same quarter a year ago.
Quarterly results were also impacted by $1.1 million of costs related to the Carrier Enterprise transaction as well as the adoption of the accounting pronouncement, FSP EITF 03-06-1. Excluding these items, non-GAAP earnings per share for the second quarter were $0.61 per share, down from $0.94 per share in the same quarter a year ago.
On average, twelve analysts polled by Thomson Reuters expected earnings of $0.62 per share for the second quarter. Analysts estimate typically excludes special items such as one-time charges or gains.
Operating income for the second quarter plunged to $26.294 million from $42.326 million in the corresponding quarter a year ago, hurt by a decline in gross margins. Gross margin declined to 24.9% from 25.7% in the same quarter a year ago.
Revenues for the second quarter declined to $404.971 million from $509.822 million in the same quarter a year ago and came in below the Street's estimate of $406.80 million.
The lower revenues attributed to decline in unit demand due to the economic down turn as well as a drop in pricing for certain commodity products and significant weakness in its western operations. These factors negatively impacted the sales by $46 million and also contributed 44% to the overall decline in quarterly sales.
For six months, net income more than halved to $15.110 million or $0.52 per share from $33.694 million or $1.17 per share in the same period a year ago. Revenues for the six months declined to $404.971 million from $509.822 million in the same period last year.
WSO is currently trading at $52.25, up $1.62 or 3.20%, on a volume of 0.353 million shares on the NYSE.
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