Revenue Analysis
Total and Operating Revenue: Over the reported periods, WCC’s Total and Operating Revenues have exhibited growth. From 2023-06 to 2023-09, revenue increased from $5.745 billion to $5.644 billion, and further to $5.47 billion by 2024-03. This progression suggests a positive trajectory in WCC’s revenue-generating operations.
Gross Profit Margins: Gross profit has also increased over time, aligning with the rise in total revenue. Gross profit in 2023-06 was $1.242 billion and increased to $1.222 billion by 2023-09, reaching approximately $1.138 billion by 2024-03. The margins have demonstrated consistent growth aligned with higher sales volumes.
Cost Management
Cost of Revenue: The Cost of Revenue has been substantial, illustrating the high cost base associated with WCC’s operations. The cost stood at $4.503 billion in 2023-06 and reached approximately $4.212 billion by 2024-03, aligning with fluctuating gross profits.
Operating Expense: The Operating Expenses, including Selling General and Administration and other relevant costs, were $878.6 million in 2023-06 and showed a slight decrease to $850.6 million by 2023-03. This indicates a slightly better management of operating costs.
Total Expenses: Total Expenses followed a similar pattern, tallying at $5.382 billion in 2023-06 and reducing to $5.164 billion by 2023-03, which suggests effective cost management strategies.
Profitability Analysis
EBITDA and Operating Income: EBITDA of $409.9 million in 2023-06 increased to $380.7 million by 2023-03. Operating Income showed a similar trend, being $363.8 million in 2023-06 and adjusting to around $265.1 million by 2024-03. These figures indicate solid operational profitability though with some fluctuations.
Pretax and Net Income: Pretax Income was $264.2 million in 2023-06 and increased to $241.3 million by 2023-03, showing a trend of generally maintained profitability. Net Income for the same periods changed from $193.1 million to approximately $115.8 million, highlighting significant variances likely due to non-operating factors and possibly taxation.
Cash Flow Indicators
Reconciled Depreciation: Reconciled Depreciation remained consistently around $44-$46 million through the periods, suggesting steady investments in capital and a stable depreciation policy.
Interest Expense: Interest Expenses were slightly variable but considerable, approximately $98.8 million in 2023-06 and about $94.4 million by 2024-03, reflecting a significant debt load and its associated costs.
Taxation
Tax Rate: The varying tax rates, from 27.2% in 2023-06 decreasing to 18.276% by 2023-03, then slightly up to 21.0204% by 2024-03, reflect changes in tax liabilities and potentially differing applications of tax regulations.
Tax Provision: Tax provisions were significant and rising, from $71.8 million in 2023-06 to about $30.9 million by 2024-03, indicating the impact of profitability and operational management on tax liabilities.
Shareholder Metrics
EPS and Net Income Available to Common Stockholders: Diluted EPS ranged from $3.41 in 2023-06 to $1.95 by 2024-03. Net Income Available to Common Stockholders decreased over the same period from $178.7 million to $101.4 million. This reduction suggests issues that might concern investors regarding value generation.
Conclusion
WCC has demonstrated growth in revenue and gross profit while seeing some ups and downs in net income and operating income, suggestive of challenges in managing non-operating expenses and possibly fluctuating market conditions. Cost management has shown effectiveness, though careful monitoring of debt-related costs and tax liabilities is advised. Strategic approaches to enhance operational efficiency and shareholder value are recommended.