International. Wesco announced that its first-quarter sales met its expectations, being consistent with the company's projected outlook for the first three months of the year.
"Our performance, compared to the strong first quarter a year ago, was in line with our typical seasonal pattern and our full-year outlook. Activity levels and our order book remain healthy and support our vision for sequential growth as the year progresses," said Juan Engel, Chairman, President and CEO of Wesco.
The executive also referred to the generation of free cash flow, something on which the company is very focused: "It was US $731 million in the first quarter and more than US $1,400 million during the last twelve months. As a result, our financial leverage now stands at 2.6 times EBITDA and close to our target range of 1.5 to 2.5 times."
Wesco maintains its full-year outlook for adjusted earnings per share as it expects to increase its share repurchase activity using the proceeds received from the divestiture. Given record cash performance in the first quarter, the company increased its full-year free cash flow outlook from $800 million to $1 billion.
Results
Net sales were $5.4 billion for the first quarter of 2024 compared to $5.5 billion for the first quarter of 2023, a decrease of 3.1%. Organic sales for the first quarter of 2024 decreased by 3.2%.
The order book at the end of the first quarter of 2024 decreased by 10% compared to the end of the first quarter of 2023. Sequentially, the order book increased by approximately 1% in the quarter.
The cost of goods sold for the first quarter of 2024 was $4.2 billion compared to $4.3 billion for the first quarter of 2023. Meanwhile, gross profit was $1.1 billion for the first quarter of 2024 compared to $1.2 billion for the first quarter of 2023.
As a percentage of net sales, gross profit was 21.3% and 21.9% for the first quarter of 2024 and 2023, respectively. The decline in gross profit as a percentage of net sales for the first quarter of 2024 primarily reflects a change in the sales mix and lower rebates by supplier volume.
SG&A expenses amounted to US$829.4 million (15.5% of net sales) for the first quarter of 2024, compared to US$817.7 million (14.8% of net sales) for the first quarter of 2023.
Operating profit was $263 million for the first quarter of 2024 compared to $346.4 million for the first quarter of 2023, a decrease of $83.4 million equivalent to 24.1%.
Net income attributable to common shareholders was $101.4 million for the first quarter of 2024 compared to $182.7 million for the first quarter of 2023.
Earnings per diluted share for the first quarter of 2024 were $1.95 based on 51.9 million diluted shares, compared to $3.48 for the first quarter of 2023, based on 52.5 million diluted shares.
Operating cash flow for the first quarter of 2024 was an inflow of US$746.3 million, compared to an outflow of US$255.4 million for the first quarter of 2023. Free cash flow for the first quarter of 2024 was $731.4 million, or 546% of adjusted net income. Net cash inflows in the first quarter of 2024 were primarily due to net income of $116.1 million and changes in net working capital.
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