WESCO’s first quarter results came in with revenue above Wall Street’s expectations, but non-GAAP earnings per share fell short of analyst forecasts. Management pointed to robust demand in the data center segment, which saw a 70% year-over-year increase, as a primary growth driver. High single-digit gains in the OEM and broadband businesses also contributed, while continued weakness in the utility segment—driven by customer inventory destocking—acted as a drag. CEO John Engel highlighted ongoing operational improvements and a stable gross margin, noting, “Gross margin was relatively stable on a sequential basis versus the fourth quarter and improved sequentially in CSS also as we expected.”
Is now the time to buy WCC? Find out in our full research report (it’s free).
WESCO (WCC) Q1 CY2025 Highlights:
- Revenue: $5.34 billion vs analyst estimates of $5.25 billion (flat year on year, 1.8% beat)
- Adjusted EPS: $2.21 vs analyst expectations of $2.32 (4.7% miss)
- Adjusted EBITDA: $310.7 million vs analyst estimates of $323 million (5.8% margin, 3.8% miss)
- Operating Margin: 4.5%, in line with the same quarter last year
- Organic Revenue rose 5.6% year on year (-3.2% in the same quarter last year)
- Market Capitalization: $8.89 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions WESCO’s Q1 Earnings Call
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Stephen Volkmann (Jefferies) asked whether tariff-related price increases are included in guidance; CFO Dave Schulz clarified that these are not yet reflected due to a typical two-quarter delay before impacting revenue.
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Nigel Coe (Wolfe Research) pressed for details on supplier price increases and surcharges; CEO John Engel explained recent increases are more pronounced in Q2 and vary by supplier, with WESCO generally seeking to incorporate surcharges into overall price increases for transparency.
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Deane Dray (RBC Capital Markets) questioned the sustainability of data center growth and mix of products versus services; Engel described expanding scope of supply and integration of acquisitions, noting strong customer demand and growing backlog.
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Sam Darkatsh (Raymond James) asked if prospective pricing impacts are uniform across business units; Engel and Schulz responded that price increases are more concentrated in EES and utility, while CSS sees less pricing benefit due to differing supplier bases.
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Patrick Baumann (JPMorgan) inquired about margin expectations and performance in Canada; Schulz indicated gross margin is expected to decline versus last year, while Engel reported strong Canadian results and market share gains across all verticals.
Catalysts in Upcoming Quarters
Going forward, the StockStory team will be monitoring (1) the pace and profitability of data center growth, including how well WESCO converts backlog into revenue, (2) the effects of tariff-driven price increases on demand and gross margin, and (3) progress on utility segment recovery as customers finish destocking and project activity returns. Execution on supply chain adjustments and margin management will also be important signposts.
WESCO currently trades at $182.13, up from $162.57 just before the earnings. Is the company at an inflection point that warrants a buy or sell? Find out in our full research report (it’s free).
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