Watsco (NYSE:WSO) Shares Gap Down on Disappointing Earnings

Watsco, Inc. (NYSE:WSO) gapped down prior to trading on Wednesday following a weaker than expected earnings announcement. The stock had previously closed at $484.77, but opened at $454.91. Watsco shares last traded at $469.99, with a volume of 38,082 shares traded.

The construction company reported $4.22 EPS for the quarter, missing the consensus estimate of $4.73 by ($0.51). The business had revenue of $2.16 billion during the quarter, compared to analyst estimates of $2.24 billion. Watsco had a net margin of 7.02% and a return on equity of 18.55%. The business’s revenue for the quarter was up 1.6% on a year-over-year basis. During the same period last year, the company earned $4.35 EPS.

Watsco Dividend Announcement

The business also recently disclosed a quarterly dividend, which will be paid on Thursday, October 31st. Stockholders of record on Wednesday, October 16th will be paid a $2.70 dividend. This represents a $10.80 annualized dividend and a dividend yield of 2.26%. The ex-dividend date of this dividend is Wednesday, October 16th. Watsco’s payout ratio is currently 83.08%.

Analyst Upgrades and Downgrades

Several research firms have recently issued reports on WSO. Robert W. Baird decreased their price objective on shares of Watsco from $550.00 to $540.00 and set an “outperform” rating for the company in a research report on Thursday. JPMorgan Chase & Co. increased their price target on shares of Watsco from $420.00 to $425.00 and gave the stock a “neutral” rating in a research note on Wednesday, July 31st.

Hedge Funds Weigh In On Watsco

Several institutional investors and hedge funds have recently added to or reduced their stakes in the business. Hunter Associates Investment Management LLC raised its holdings in Watsco by 1.8% during the third quarter. Hunter Associates Investment Management LLC now owns 6,555 shares of the construction company’s stock worth $3,223,000 after purchasing an additional 115 shares during the last quarter. Autumn Glory Partners LLC boosted its holdings in shares of Watsco by 149.8% during the third quarter. Autumn Glory Partners LLC now owns 1,369 shares of the construction company’s stock worth $679,000 after purchasing an additional 821 shares during the last quarter. Semanteon Capital Management LP increased its position in Watsco by 202.4% during the third quarter. Semanteon Capital Management LP now owns 2,313 shares of the construction company’s stock worth $1,138,000 after purchasing an additional 1,548 shares during the last quarter. State of Alaska Department of Revenue raised its holdings in Watsco by 16.1% in the third quarter. State of Alaska Department of Revenue now owns 4,037 shares of the construction company’s stock valued at $1,985,000 after buying an additional 560 shares during the period. Finally, Hamlin Capital Management LLC lifted its stake in shares of Watsco by 7.4% during the third quarter. Hamlin Capital Management LLC now owns 314,543 shares of the construction company’s stock worth $154,717,000 after purchasing an additional 21,649 shares in the last quarter. Institutional investors and hedge funds own 89.71% of the company’s stock.

Watsco Price Performance

The company has a market cap of $19.27 billion, a PE ratio of 36.78 and a beta of 0.88. The company has a quick ratio of 1.55, a current ratio of 3.21 and a debt-to-equity ratio of 0.01. The business’s 50 day moving average price is $481.96 and its 200-day moving average price is $473.32.

Watsco Company Profile

Watsco, Inc, together with its subsidiaries, engages in the distribution of air conditioning, heating, refrigeration equipment, and related parts and supplies in the United States and internationally. The company distributes equipment, including residential ducted and ductless air conditioners, such as gas, electric, and oil furnaces; commercial air conditioning and heating equipment systems; and other specialized equipment.