Watsco (WSO) Q4 FY2023 earnings: revenue $1.6 billion, up 1.4% on the year

Watsco Inc. (WSO) reported revenue of $1.6 billion for Q4 FY2023, the quarter ended 31 December 2023, up 1.4% on the same quarter a year earlier. Net income was $83 million, down 40.0% on the year, and diluted earnings per share $2.06. The figures are the company's own, from the 10-K it filed with the SEC on 23 February 2024.

Revenue$1.6 billionup 1.4%

Net income$83 milliondown 40.0%

Diluted EPS$2.06

QuarterQ4 FY2023ended 31 December 2023

The quarter, against the one before and a year earlier

Line	Q4 FY2023	Q3 FY2023	A year earlier	Change on the year
Revenue	1,603	2,127	n/a	n/a
Cost of revenue	1,189	1,560	n/a	n/a
Gross profit	414	567	n/a	n/a
Gross margin	25.8%	26.7%	n/a
Selling, general and administrative	312	320	n/a	n/a
Operating income	108	257	n/a	n/a
Operating margin	6.7%	12.1%	n/a
Pre-tax income	109	255	n/a	n/a
Income tax	11.0	54.1	n/a	n/a
Effective tax rate	10.1%	21.2%	n/a
Net income	82.5	171	n/a	n/a
Net margin	5.1%	8.0%	n/a
Diluted EPS	$2.06	$4.35	n/a	n/a

$ million except per share.

Fourth quarters are the year less the first three quarters. Free cash flow is operating cash flow less capital expenditure; the effective tax rate is income tax over pre-tax income; margins are the line over revenue. Gross profit is revenue less cost of revenue, and operating income is revenue less the company's own total costs, where the statement does not print those lines. Those four are arithmetic on the filed numbers; everything else is as filed. Money is in $ million as the company files it, or in $ billion by the switch above the tables; per share figures and share counts are as they are.

Cash flow and capital returned

Line	Q4 FY2023	Q3 FY2023	A year earlier	Change on the year
Operating cash flow	299	353	n/a	n/a
Capital expenditure	10.0	9.7	n/a	n/a
Free cash flow	289	343	n/a	n/a
Free cash flow margin	18.0%	16.1%	n/a
Cash from investing	-13.3	-10.5	n/a	n/a
Cash from financing	-252	-328	n/a	n/a
Depreciation and amortisation	9.7	8.8	n/a	n/a
Share-based compensation	9.2	7.3	n/a	n/a
Dividends paid	96.5	95.7	n/a	n/a
Dividend per share	n/a	$2.45	n/a	n/a

Cash flow lines for the quarter; where the company files them year to date, the quarter is the difference between two filings.

Balance sheet at quarter end

Line	Q4 FY2023	Q3 FY2023	A year earlier	Change on the year
Shareholders' equity	2,230	2,224	n/a	n/a
Non-controlling interest	386	442	n/a	n/a
Debt	305	390	n/a	n/a
Operating lease liabilities	277	n/a	n/a	n/a
Finance lease liabilities	12.2	12.6	n/a	n/a
Other liabilities	519	970	n/a	n/a
Total liabilities and equity	3,729	4,039	n/a	n/a
Fixed assets	136	134	n/a	n/a
Goodwill	457	492	n/a	n/a
Intangible assets	218	172	n/a	n/a
Investments	0.0	n/a	n/a	n/a
Cash and equivalents	210	175	n/a	n/a
Receivables	798	949	n/a	n/a
Inventory	1,347	1,550	n/a	n/a
Other assets	562	567	n/a	n/a
Total assets	3,729	4,039	n/a	n/a

Quarterly results, the last 12 quarters

	Q3 FY2023	Q4 FY2023 *	Q1 FY2024	Q2 FY2024	Q3 FY2024	Q4 FY2024 *	Q1 FY2025	Q2 FY2025	Q3 FY2025	Q4 FY2025 *	Q1 FY2026	Q2 FY2026
Revenue	2,127	1,603	1,565	2,139	2,160	1,754	1,531	2,062	2,067	1,579	1,533	2,105
Cost of revenue	1,560	1,189	1,134	1,560	1,594	1,286	1,101	1,459	1,498	1,150	1,105	1,526
Gross profit	567	414	431	580	566	468	430	603	569	428	428	579
Gross margin	27%	26%	28%	27%	26%	27%	28%	29%	28%	27%	28%	28%
SG&A	320	312	310	319	326	338	323	339	344	333	323	349
Operating income	257	108	127	269	250	136	112	272	235	102	110	238
Operating margin	12%	7%	8%	13%	12%	8%	7%	13%	11%	6%	7%	11%
Pre-tax income	255	109	129	274	257	143	118	274	238	107	117	242
Tax rate	21%	10%	19%	22%	22%	19%	20%	21%	21%	19%	20%	21%
Net income	171	82.5	87.0	181	171	96.8	80.1	184	162	71.7	79.1	163
Net margin	8%	5%	6%	8%	8%	6%	5%	9%	8%	5%	5%	8%
Diluted EPS	$4.35	$2.06	$2.17	$4.49	$4.22	$2.37	$1.93	$4.52	$3.98	$1.82	$1.87	$4.00
Operating cash flow	353	299	104	57.7	233	379	-178	-7.4	355	400	-18.9	-2.5
Capital expenditure	9.7	10.0	5.8	6.4	9.8	8.0	7.5	6.8	8.9	11.3	7.0	9.0
Free cash flow	343	289	97.9	51.3	223	371	-185	-14.3	346	388	-25.9	-11.5
Dividends paid	95.7	96.5	96.8	109	109	109	109	121	122	122	122	134
Filing	10-Q	10-K	10-Q	10-Q	10-Q	10-K	10-Q	10-Q	10-Q	10-K	10-Q	10-Q

Each quarter as filed, linked to its filing.

* The fourth quarter is the full year less the first three quarters, because the company files the year and not the quarter on its own. A fourth quarter's EPS and diluted share count are from the company's results press release for that quarter, used where the release gives the same revenue and net income as the table. Money is in $ million as the company files it, or in $ billion by the switch above the tables; per share figures and the share count are as they are. Free cash flow is operating cash flow less capital expenditure; the effective tax rate is income tax over pre-tax income; margins are the line over revenue. Gross profit is revenue less cost of revenue, and operating income is revenue less the company's own total costs, where the statement does not print those lines. Cash flow lines filed year to date are the difference between two filings. Shares outstanding are at the period end where the balance sheet tags them, otherwise the count on the filing's cover page. A derived fourth-quarter EPS is left blank when a split in the year makes the arithmetic meaningless.

Source

10-K for the period ended 31 December 2023, filed 23 February 2024, accession 0001193125-24-044609: the filing on EDGAR. All of Watsco Inc.'s filings: EDGAR company page.

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