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It has been about a month since the last earnings report for Watsco (WSO - Free Report) . Shares have added about 0.8% in that time frame, underperforming the S&P 500.

But investors have to be wondering, will the recent positive trend continue leading up to its next earnings release, or is Watsco due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.

Watsco Q2 Earnings & Revenues Miss Estimates as Margins ContractWatsco reported second-quarter 2026 results with earnings and revenues missing the Zacks Consensus Estimate.  Revenues increased year over year, while earnings declined.

The earnings shortfall primarily reflected lower gross margins, as unusually favorable OEM pricing actions in the prior-year period created a difficult comparison. Nonetheless, same-store sales improved, supported by better residential HVAC equipment demand.

Inside WSO’s Q2 HeadlinesThe company reported earnings of $4 per share, down 11.5% from $4.52 a year ago. The figure missed the Zacks Consensus Estimate of $4.38 by 8.7%.

Revenues rose 2.1% year over year to $2.10 billion but missed the $2.16 billion consensus by 2.6%.

WSO's Residential HVAC Sales Gain GroundHVAC equipment sales, excluding acquisitions, increased 3% and represented 68% of second-quarter sales. Residential product sales advanced 5%, including a 5% increase in U.S. markets and a 1% gain in international markets. Domestic residential compressor-bearing system volumes rose 2%, while average selling prices increased 2%.

Commercial HVAC product sales declined 8%. Other HVAC products, representing 28% of sales, decreased 1%, while commercial refrigeration products, accounting for 4%, increased 19%. Management said the refrigeration increase reflected customer wins at one of its business units, while commercial HVAC weakness was concentrated in variable refrigerant flow products.

Watsco Faces a Tough Gross Margin ComparisonGross profit fell 4% year over year to $578.9 million. Gross margin contracted 180 basis points to 27.5% from 29.3%, primarily because 2025 benefited from significant inflationary manufacturer pricing actions, while 2026 pricing returned closer to historical levels.

Management described the recent margin range as more consistent with the company's longer-term trend. It maintained its long-term goal of reaching a 30% gross profit margin through operating and technology initiatives.

WSO's Higher Costs Weigh on Operating ProfitSelling, general and administrative expenses increased 3% to $349 million and rose to 16.6% of revenues from 16.4%. On a same-store basis, SG&A expenses increased 2%, mainly because of higher facilities and transportation costs, partly offset by lower salaries.

Operating income declined 12% to $238.4 million, while operating margin fell to 11.3% from 13.2%. The combination of lower gross profit and higher operating expenses outweighed the benefit of lower income taxes.

Watsco Adds Jackson Supply to Its Sunbelt FootprintWatsco completed the acquisition of Jackson Supply on June 1. Jackson generated approximately $230.0 million in annual sales in 2025 and operates 25 locations across Texas, Louisiana, Tennessee, Alabama, Mississippi, Oklahoma and Arizona.

The transaction helped lift Watsco's network to 723 locations as of June 30, 2026. Management said Jackson's profitability is consistent with Watsco's overall profile and highlighted the acquired company's plans to expand using Watsco's capital, technology and supplier relationships.

WSO's Cash Use Improves and Balance Sheet Stays CleanWatsco ended June 2026 with $364.2 million in cash and cash equivalents, up 24.3% from $293 million a year earlier. The company also held $100 million in short-term cash investments and had no outstanding balance under its $600 million revolving credit agreement.

Cash used in operating activities narrowed to $21.4 million in the first half of 2026 from $185.1 million a year earlier. The improvement primarily reflected the timing of vendor payments and a lower increase in inventory, partly offset by higher accounts receivable. Working capital reached $2.37 billion at quarter-end.

How Have Estimates Been Moving Since Then?It turns out, fresh estimates have trended downward during the past month.

The consensus estimate has shifted -6.58% due to these changes.

VGM ScoresAt this time, Watsco has a average Growth Score of C, though it is lagging a lot on the Momentum Score front with an F. However, the stock has a score of C on the value side, putting it in the middle 20% for value investors.

Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.

OutlookEstimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Interestingly, Watsco has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.

Have you assessed how the international operations of Watsco (WSO - Free Report) performed in the quarter ended June 2026? For this heating and cooling company, possessing an expansive global footprint, parsing the trends of international revenues could be critical to gauge its financial resilience and growth prospects.

In the modern, closely-knit global economic landscape, the capacity of a business to access foreign markets is often a key determinant of its financial well-being and growth path. Investors now place great importance on grasping the extent of a company's dependence on international markets, as it sheds light on the firm's earnings stability, its skill in leveraging various economic cycles and its broad growth potential.

International market involvement serves as insurance against economic downturns at home and enables engagement with economies that are growing more quickly. Still, this move toward diversification is not without its challenges, as it involves navigating through the fluctuations of currencies, geopolitical threats, and the distinctive nature of various markets.

While delving into WSO's performance for the past quarter, we observed some fascinating trends in the revenue from its foreign segments that are commonly modeled and observed by analysts on Wall Street.

The company's total revenue for the quarter amounted to $2.1 billion, showing rise of 2.1%. We will now explore the breakdown of WSO's overseas revenue to assess the impact of its international operations.

A Dive into WSO's International Revenue TrendsDuring the quarter, Canada contributed $88.32 million in revenue, making up 4.2% of the total revenue. When compared to the consensus estimate of $97.1 million, this meant a surprise of -9.04%. Looking back, Canada contributed $67.39 million, or 4.4%, in the previous quarter, and $93.71 million, or 4.5%, in the same quarter of the previous year.

Of the total revenue, $89.79 million came from Latin America and the Caribbean during the last fiscal quarter, accounting for 4.3%. This represented a surprise of -9.87% as analysts had expected the region to contribute $99.62 million to the total revenue. In comparison, the region contributed $70.14 million, or 4.6%, and $94.35 million, or 4.6%, to total revenue in the previous and year-ago quarters, respectively.

International Revenue PredictionsFor the current fiscal quarter, it is anticipated by Wall Street analysts that Watsco will post revenues of $2.2 billion, which reflects an increase of 6.4% the same quarter in the previous year. The revenue contributions are expected to be 4.6% from Canada ($100.17 million), and 4.7% from Latin America and the Caribbean ($103.25 million).

For the full year, a total revenue of $7.51 billion is expected for the company, reflecting an increase of 3.8% from the year before. The revenues from Canada and Latin America and the Caribbean are expected to make up 4.6%, and 4.7% of this total, corresponding to $342.77 million, and $353.45 million, respectively.

Closing RemarksRelying on global markets for revenues presents both prospects and challenges for Watsco. Therefore, scrutinizing its international revenue trends is key to effectively forecasting the company's future outlook.

With the increasing intricacies of global interdependence and geopolitical strife, Wall Street analysts meticulously observe these patterns, especially for companies with an international footprint, to tweak their forecasts of earnings. Importantly, several additional factors, such as a company's domestic market status, also impact these earnings forecasts.

Emphasizing a company's shifting earnings prospects is a key aspect of our approach at Zacks, especially since research has proven its substantial influence on a stock's price in the short run. This correlation is positively aligned, meaning that improved earnings projections tend to boost the stock's price.

Boasting a remarkable track record that's been externally verified, the Zacks Rank, our unique stock rating system, leverages changes in earnings projections to function as a reliable gauge for predicting short-term stock price movements.

At present, Watsco holds a Zacks Rank #3 (Hold). This ranking implies that its near-term performance might mirror the overall market movement. You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>> .

Exploring Recent Trends in Stock PriceThe stock has declined by 14% over the past month compared to the 3.4% increase of the Zacks S&P 500 composite. Meanwhile, the Zacks Industrial Products sector, which includes Watsco,has increased 2.7% during this time frame. Over the past three months, the company's shares have experienced a loss of 18.1% relative to the S&P 500's 6% increase. Throughout this period, the sector overall has witnessed a 4.3% increase.

Posted by Defense World Staff on Aug 5th, 2026

Amundi lowered its stake in shares of Watsco, Inc. (NYSE:WSO – Free Report) by 14.1% during the first quarter, according to the company in its most recent disclosure with the Securities & Exchange Commission. The fund owned 47,567 shares of the construction company’s stock after selling 7,785 shares during the quarter. Amundi owned about 0.12% of Watsco worth $17,304,000 at the end of the most recent quarter.

Several other institutional investors have also recently added to or reduced their stakes in the stock. Torren Management LLC purchased a new stake in shares of Watsco during the fourth quarter worth approximately $26,000. Bayban acquired a new stake in shares of Watsco in the 4th quarter worth $29,000. Bamco Inc. NY acquired a new stake in shares of Watsco in the 4th quarter worth $35,000. Laurel Wealth Advisors LLC purchased a new stake in shares of Watsco in the fourth quarter valued at about $37,000. Finally, Quarry LP purchased a new stake in shares of Watsco in the fourth quarter valued at about $37,000. Institutional investors and hedge funds own 89.71% of the company’s stock.

Analysts Set New Price Targets WSO has been the topic of a number of analyst reports. Stephens lifted their price objective on Watsco from $475.00 to $485.00 and gave the company an “overweight” rating in a report on Wednesday, April 29th. DA Davidson cut their target price on Watsco from $385.00 to $330.00 and set a “neutral” rating for the company in a research note on Thursday, July 30th. Wall Street Zen raised Watsco from a “sell” rating to a “hold” rating in a report on Saturday, May 2nd. Robert W. Baird set a $400.00 price target on Watsco in a research note on Thursday, July 30th. Finally, Morgan Stanley upped their price objective on Watsco from $370.00 to $405.00 and gave the stock an “equal weight” rating in a report on Friday, July 10th. Two investment analysts have rated the stock with a Buy rating and nine have given a Hold rating to the company. According to data from MarketBeat.com, the stock currently has an average rating of “Hold” and an average target price of $395.50.

Get Our Latest Report on Watsco

Watsco Trading Up 5.1% Shares of WSO opened at $334.27 on Wednesday. The firm’s 50-day moving average is $377.41 and its two-hundred day moving average is $391.80. Watsco, Inc. has a twelve month low of $300.66 and a twelve month high of $459.00. The firm has a market capitalization of $13.59 billion, a P/E ratio of 28.99 and a beta of 1.05.

Watsco (NYSE:WSO – Get Free Report) last posted its quarterly earnings results on Wednesday, July 29th. The construction company reported $4.00 earnings per share (EPS) for the quarter, missing analysts’ consensus estimates of $4.41 by ($0.41). The company had revenue of $2.10 billion for the quarter, compared to analyst estimates of $2.14 billion. Watsco had a net margin of 6.53% and a return on equity of 14.40%. Watsco’s revenue was up 2.1% on a year-over-year basis. During the same quarter in the previous year, the business posted $4.52 earnings per share. Analysts predict that Watsco, Inc. will post 12.55 EPS for the current year.

Watsco Dividend Announcement The company also recently declared a quarterly dividend, which was paid on Friday, July 31st. Stockholders of record on Thursday, July 16th were paid a dividend of $3.30 per share. This represents a $13.20 annualized dividend and a dividend yield of 3.9%. The ex-dividend date of this dividend was Thursday, July 16th. Watsco’s payout ratio is 114.48%.

About Watsco (Free Report)

Watsco, Inc is the largest distributor of heating, ventilation, air conditioning and refrigeration (HVAC/R) equipment, parts and supplies in the United States. Headquartered in Miami, Florida, the company operates a network of more than 600 branches across the continental U.S., Canada and Puerto Rico. Watsco serves residential and commercial contractors by providing essential components for climate control systems, including air conditioners, furnaces, heat pumps, coils, refrigerants, controls and electrical and piping supplies.

Founded in 1947, Watsco has grown from a single regional distributor into an industry leader through a combination of organic expansion, acquisitions and strategic partnerships with original equipment manufacturers such as Carrier, Trane, Goodman and Lennox.

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Watsco NYSE: WSO reported second-quarter sales growth as residential HVAC equipment demand improved, while gross margin declined from an unusually strong prior-year comparison tied to earlier manufacturer pricing actions and product-transition effects.

Chairman and Chief Executive Officer Al Nahmad said the company’s operating environment is becoming more conventional after several years marked by pandemic disruptions, supply-chain issues, regulatory transitions and tariff volatility. “Revenue is growing, and a digital ecosystem is producing measurable results,” he said.

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Second-quarter sales rose 2% to $2.1 billion. Residential HVAC equipment, Watsco’s largest product segment, increased 5%, supported by gains in both unit volume and pricing. Operating income was $238 million, producing an operating margin of 11.3%, while earnings were $4.00 per share.

Gross profit totaled $579 million, and gross margin was 27.5%, compared with 29.3% in the prior-year quarter. Nahmad said 2025 margins benefited from aggressive original equipment manufacturer pricing actions in response to inflation and tariffs. Pricing actions in 2026 have been more moderate and closer to historical patterns.

Margin comparison and inventory trends Senior Vice President Barry Logan characterized the prior-year margin result as an anomaly rather than a new baseline. He said gross margin has been in a relatively narrow range over the past 12 months, with 27%-plus representing the company’s expected baseline based on longer-term trends.

Logan said equipment sales grew faster than non-equipment sales during the quarter, affecting margin because the categories carry different gross-margin profiles. Lower inventory levels also reduced certain purchasing discounts and rebates, he said, though the company views lower inventory ownership as appropriate as supply conditions normalize.

Management reiterated its longer-term objective of reaching a 30% gross margin. President A.J. Nahmad said the company is investing in technology, operations and pricing capabilities to support that goal.

Watsco ended the quarter with $464 million in cash and no debt. Operating cash flow improved by $168 million during the first six months, which the company attributed to a lower seasonal inventory build. Logan said inventory was about $100 million above what management may have anticipated, equivalent to roughly seven days of inventory, while field inventory was down nearly $200 million. The June 1 acquisition of Jackson Supply added about $60 million of inventory.

Nahmad said the company expects inventory turns to gradually improve as manufacturer supply chains become healthier and the A2L product transition moves further into the past.

Jackson Supply acquisition and market conditions Watsco completed its acquisition of Jackson Supply on June 1. Jackson has approximately $230 million in annual sales and operates from 25 Sunbelt locations. The acquisition contributed roughly $20 million of revenue in June, according to Logan’s calculation during the call.

Management described Jackson as an entrepreneurial business with a history of expansion. Logan said the company had doubled from roughly $100 million to $230 million of sales in recent years and has its own goal of doubling again over time. Watsco plans to support Jackson with capital, supplier relationships and technology while allowing its leadership team to continue operating the business.

On broader demand, Executive Vice President Paul Johnston said new construction activity has slowed in Florida and Texas, two major Southern markets. He contrasted that weakness with stronger demand in Northern states. Watsco said commercial HVAC was down 8%, driven primarily by a decline in variable refrigerant flow, or VRF, activity during its own A2L transition. Unitary commercial and applied commercial activity were relatively flat, while international business declined by a single-digit percentage.

Management said it views the overall market as stable rather than worsening. Logan said the company was seeing 4% to 5% organic growth through July 28, including unit growth. He cautioned that Watsco does not provide formal earnings guidance.

Digital platforms expand A.J. Nahmad said Watsco’s technology investments are intended to improve customer service, increase operational efficiency and help contractors expand their businesses. E-commerce sales rose 13% in the first half and represented 37% of sales over the past 12 months. In some markets, e-commerce penetration reached 60% to 70%.

The company’s mobile applications had more than 70,000 monthly active users. Its OnCall Air platform generated more than 340,000 homeowner proposals over the past year, representing $1.9 billion of gross merchandise value, up 15% from the comparable period.

Watsco also launched SupplySync.com during the second quarter for larger institutional customers. The company plans to expand the platform over time. Other initiatives include Vendor Consolidation and Rationalization, or VCR, which is focused on strengthening supplier relationships and broadening non-equipment product availability, and Hydros, a shared logistics and distribution program among Watsco business units.

Management said digital transactions can increase order line items, often adding accessory products that support margins. The company is also using pricing optimization tools to improve product pricing profiles across markets and customers.

Watsco increased its annual dividend by 10% in April to $13.20 per share. Nahmad noted that 2026 marks the company’s 52nd consecutive year of paying dividends.

About Watsco (NYSE:WSO)Watsco, Inc is the largest distributor of heating, ventilation, air conditioning and refrigeration (HVAC/R) equipment, parts and supplies in the United States. Headquartered in Miami, Florida, the company operates a network of more than 600 branches across the continental U.S., Canada and Puerto Rico. Watsco serves residential and commercial contractors by providing essential components for climate control systems, including air conditioners, furnaces, heat pumps, coils, refrigerants, controls and electrical and piping supplies.

Founded in 1947, Watsco has grown from a single regional distributor into an industry leader through a combination of organic expansion, acquisitions and strategic partnerships with original equipment manufacturers such as Carrier, Trane, Goodman and Lennox.

This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected].

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On July 29, 2026, Watsco Inc (WSO) shares fell by 12.9%, bringing the current price to $320.02. This decline is significant, particularly within the context of

Watsco (WSO -15.16%) stock tumbled 15.3% through 10:45 a.m. ET Wednesday after missing badly on earnings this morning.

Analysts had forecast that the HVAC equipment distributor would earn $4.41 per share on more than $2.1 billion in Q2 sales. In fact, Watsco earned $4 per share, and its sales fell just short of expectations.

Image source: Getty Images.

Watsco Q2 earnings Watsco calls itself "the largest distributor in the highly fragmented North American HVAC market," but business isn't exactly booming in this market. The company grew its revenues only 2% year over year in Q2, and gross profit declined while operating costs rose.

"Thanks" to this dynamic -- slow growth, rising costs, and falling profits -- Watsco's earnings declined 12% year over year.

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What's next for Watsco So how does Watsco improve on this? By buying growth. The company purchased Jackson Supply, "among largest Sunbelt HVAC distributors" last month, and "continues to actively seek new businesses that will join the Watsco family."

In a fragmented market like Watsco says HVAC is, that's a viable way forward, and Watsco certainly has cash available to fund it. Debt levels aren't much above cash on hand, and over the last 12 months, free cash flow at the company approached $700 million -- far more than reported net income.

That said, trading at a valuation of roughly 20 times FCF but growing only modestly, Watsco stock looks overpriced to me. If the roll-up strategy changes this picture, I reserve the right to change my opinion -- but for now I do not consider Watsco stock a "buy."

Rich Smith has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Watsco. The Motley Fool has a disclosure policy.

Jackson Supply Acquisition Adds Density to Key Sunbelt Markets;
Entrepreneurial Culture and Debt-Free Balance Sheet Positions Company for Growth

MIAMI, July 29, 2026 (GLOBE NEWSWIRE) -- Watsco, Inc. (NYSE: WSO) today announced its operating results for the quarter and six months ended June 30, 2026.

Watsco is the largest distributor in the highly fragmented North American HVAC market. Since entering distribution in 1989, Watsco has achieved an 18% compounded annual total shareholder return through a combination of organic growth and the acquisition of more than 70 market-leading businesses.

During the second quarter, Watsco closed on the acquisition of Jackson Supply Company, a market-leading HVAC distributor with annualized sales of approximately $230 million across 25 Sunbelt locations. Jackson Supply offers a balanced product offering of HVAC equipment, parts and supplies. Just as importantly, Jackson Supply adds to Watsco’s community of leaders.

Watsco maintains a solid balance sheet with $464 million in cash and cash investments and no debt, enabling sustained investments in growth, including the Company’s industry-leading technologies. Today, more than 70,000 contractors and technicians engage digitally, empowering them to adopt and integrate Watsco’s tools into their daily operations. The Company is also introducing AI-driven initiatives to leverage Watsco’s extensive data assets and enrich the customer experience. The Company believes its technology ecosystem represents a durable and widening competitive advantage in the highly fragmented HVAC industry.

Second Quarter Operating Performance

Revenues increased 2% to $2.1 billion (1% on a same-store basis)Gross profit decreased 4% to $579 million (gross profit margin of 27.5% versus 29.3% last year)SG&A increased 3% to $349 million (16.6% as a percentage of sales versus 16.4% last year)Operating income decreased 12% to $238 million (operating margin of 11.3% versus 13.2% last year)Earnings per share decreased 12% to $4.00 Second Quarter Sales Trends (excluding acquisitions)

3% increase in HVAC equipment sales (68% of sales)1% decrease in sales of other HVAC products (28% of sales)19% increase in commercial refrigeration products (4% of sales) Second quarter sales reflect stabilizing end-market demand following last year’s transition to next generation HVAC systems containing A2L refrigerants, which affected virtually all domestic HVAC equipment products sold across 650 domestic locations and impacted our customers’ business as well. Domestic residential HVAC equipment sales increased 5% during the quarter, including 2% growth in unit volume and a 2% increase in average selling prices. With the A2L transition largely complete, the Company is focused on growth with existing customers, acquisition of new customers, improved operating efficiencies and optimizing inventory given a simpler operating environment.

Second quarter gross margin was impacted by the timing and magnitude of pricing actions implemented by our primary OEMs in 2025 versus 2026. Pricing actions in 2025 captured substantial inflation and tariffs, resulting in outsized benefits to last year’s gross margin. In contrast, pricing actions for 2026 have normalized, returning to levels more in line with historical trends. The comparative benefit to 2025’s gross margin, along with other A2L transition-related impacts, was approximately 130 basis-points. The Company believes that gross margin thus far in 2026, which were largely consistent with gross margin achieved for the last 12 months ended June 30, 2026, are more representative of underlying market conditions.

Albert H. Nahmad, Chairman and CEO said: “Our performance during the second quarter is indicative of improving end-market stability after a busy period of regulatory transitions. We are now operating in a more conventional environment in which Watsco’s scale, OEM relationships, and technology investments can add even more value.”

Mr. Nahmad added: “We are excited that Jackson Supply is now officially a member of the Watsco family. It is a legendary company that diversifies and expands our presence in key Sunbelt markets. We look forward to supporting their growth. I am also excited about the recent launch of SupplySync, which we introduced at our investor day last year, and continued progress on the other initiatives that are now active. We believe that Watsco is uniquely positioned for continued growth and success in our industry.”

Year to Date Operating Performance

Revenues increased 1% to $3.6 billionGross profit decreased 3% to $1 billion (gross profit margin of 27.7% versus 28.7% last year)SG&A increased 2% to $672 million (18.5% as a percentage of sales versus 18.4% last year)Operating income decreased 9% to $349 million (operating margin of 9.6% versus 10.7 % last year)Earnings per share decreased 9% to $5.92Cash used in operations of $21 million versus $185 million last year, a $164 million improvement Year to Date Sales Trends (excluding acquisitions)

1% increase in HVAC equipment sales (67% of sales)1% increase in sales of other HVAC products (29% of sales)16% increase in commercial refrigeration products (4% of sales) Innovation and Strategic Technology Initiatives
The Company’s continued investment in technology reflects a long-term strategic commitment to building capabilities that strengthen customer relationships, improve operating efficiency and support sustainable growth. Watsco has invested more than $250 million in its digital platforms over the last five years, at a current annual run rate of approximately $68 million, and the breadth of that investment spans across the customer-engagement, internal platforms to increase the speed and efficiency of our locations and emerging AI capabilities that help customers grow and deliver technical know-how quicker.

Watsco’s HVAC Pro+ Mobile Apps and E-Commerce platform have transformed the customer-experience by providing contractors with a seamless digital experience, including sourcing products, accessing technical help, real-time inventory, pricing, product information and more. These tools empower 24/7 self-service that benefit from advanced analytics, AI, technical knowledge and product recommendations. The result is a frictionless buying journey, increased convenience and higher customer satisfaction, which drives greater loyalty and repeat business with lower costs to serve.Thus far in 2026:

E-commerce sales grew 13% during the first six months of 2026, far outpacing overall revenue growth, and reached $2.7 billion for the 12 months ended June 30, 2026 (37% of sales), with outperforming regions exceeding 70% in e-commerce sales.The addition of more than 10,000 new SKUs related to the A2L product launch, including all relevant data concerning features, dimensions, capacities, consumer literature and technical information such as bills of material, warranty information, regulatory match ups and more. OnCallAir® is Watsco’s digital sales platform enabling contractors to engage, present and quote solutions to homeowners. The gross merchandise value (GMV) of products sold through OnCallAir® reached $1 billion for the first six months of 2026, a 14% increase over the same period last year. For the twelve months ended June 30, 2026, contractors presented quotes to approximately 342,000 households and generated $1.9 billion GMV, a 15% increase versus the prior comparable twelve-month period.
A.J. Nahmad, Watsco’s President, added: “Our technology platforms have continued to scale and deepen their impact for our customers. We believe that the growth in e-commerce, OnCallAir® and overall digital engagement across our network reflects the value these tools deliver to our customers every day. We have also progressed nicely with the various initiatives introduced at our investor day, including the formal launch of SupplySync and the scaling of the other initiatives announced. Our focus remains advancing these unique capabilities – with AI enabling better and faster speed to market – in ways that help our customers grow.”

Buy & Build Acquisition Strategy
The Company acquired Jackson Supply in June 2026. Jackson Supply is among largest Sunbelt HVAC distributors, serving approximately 5,000 customers from 25 locations in several high-growth Sunbelt markets.

The Company continues to actively seek new businesses that will join the Watsco family. Watsco has acquired 13 companies in recent years that today represent approximately $1.8 billion in annualized sales and 145 locations. Our “buy and build” strategy builds upon their long-standing legacies through investment in new locations, new products and by leveraging Watsco’s technology platforms. The North American distribution market remains highly fragmented with more than 2,100 HVAC distributors.

Cash Flow, Dividends, Financial Strength and Liquidity
Operating cash flow was a cash-use of $21 million for the six-month period ended June 30, 2026, reflecting the customary seasonal buildup of working capital, compared to a cash-use of $185 million for the same period in 2025, a $164 million improvement. The Company expects more conventional supply-chain trends for the remainder of 2026, providing the opportunity for better inventory turns and enhanced returns on invested capital.

In April 2026, the Company increased its annual cash dividend by 10% to $13.20 per share. Watsco has paid dividends to shareholders for 52 consecutive years. The Company’s philosophy is to share cash flow through dividends while maintaining a conservative balance sheet with continued capacity to build its distribution network. Future changes in dividends are considered in light of investment opportunities, cash flow, general economic conditions and Watsco’s overall financial condition.

The Company’s objective is to maintain a healthy balance sheet that provides low-cost capital to fund strategic growth investments. This strong financial position has been key to our ability to deliver sustained long-term returns, enabling investments regardless of macroeconomic or industry conditions. The Company’s stated goal is to generate annual operating cash flow in excess of net income.

Use of Non-GAAP Financial Information
In this release, the Company discloses non-GAAP measures on a “same-store basis”, which exclude the effects of locations closed, acquired, or locations opened, in each case during the immediately preceding 12 months, unless such locations are within close geographical proximity to existing locations. The Company believes that this information provides greater comparability regarding its ongoing operating performance. These measures should not be considered an alternative to measurements presented in accordance with U.S. GAAP.

Second Quarter Earnings Conference Call Information
Date and time: July 29, 2026 at 10:00 a.m. (EDT)
Webcast: http://investors.watsco.com (a replay will be available on the Company’s website)
Dial-in number: United States (844) 883-3908 / International (412) 317-9254

About Watsco
Watsco is the largest distributor in the highly fragmented North American HVAC/R market. Watsco’s solid financial position and culture of innovation has enabled investments in long-term growth, including the Company’s industry-leading technology platforms. Today, more than 70,000 contractors, installers and technicians engage digitally with the Company, resulting in improved growth and lower attrition. The Company is now advancing AI-driven initiatives to leverage its extensive data assets to enhance the customer experience and improve efficiencies. These investments position Watsco to capture market share as contractors increasingly adopt digital tools and incorporate data-driven solutions in their businesses.

This document includes certain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements may address, among other things, our expected financial and operational results and the related assumptions underlying our expected results. These forward-looking statements are distinguished by use of words such as “will,” “would,” “anticipate,” “expect,” “believe,” “designed,” “plan,” or “intend,” the negative of these terms, and similar references to future periods. These statements are based on management's current expectations and are subject to uncertainty and changes in circumstances. Actual results may differ materially from these expectations due to changes in economic, business, competitive market, new housing starts and completions, capital spending in commercial construction, consumer spending and debt levels, regulatory and other factors, including, without limitation, the effects of supplier concentration, competitive conditions within Watsco’s industry, the seasonal nature of sales of Watsco’s products, the ability of the Company to expand its business, insurance coverage risks and final GAAP adjustments. Detailed information about these factors and additional important factors can be found in the documents that Watsco files with the Securities and Exchange Commission, such as Form 10-K, Form 10-Q and Form 8-K. Forward-looking statements speak only as of the date the statements were made. Watsco assumes no obligation to update forward-looking information to reflect actual results, changes in assumptions or changes in other factors affecting forward-looking information, except as required by applicable law.

WATSCO, INC.
Condensed Consolidated Results of Operations
(In thousands, except share and per share data)
(Unaudited)  Quarters Ended June 30, Six Months Ended June 30,   2026   2025   2026   2025 Revenues $2,104,859  $2,062,442  $3,637,869  $3,593,528 Cost of sales  1,525,930   1,458,954   2,631,385   2,560,417 Gross profit  578,929   603,488   1,006,484   1,033,111 Gross profit margin  27.5%  29.3%  27.7%  28.7%Selling, general and administrative expenses  348,986   339,001   671,837   661,582 Other income  8,429   7,382   13,909   12,528 Operating income  238,372   271,869   348,556   384,057 Operating margin  11.3%  13.2%  9.6%  10.7%Interest income, net  3,497   2,329   9,956   7,746 Income before income taxes  241,869   274,198   358,512   391,803 Income taxes  50,567   57,430   74,269   80,495 Net income  191,302   216,768   284,243   311,308 Less: net income attributable to non-controlling interest  27,966   33,155   41,833   47,634 Net income attributable to Watsco, Inc. $163,336  $183,613  $242,410  $263,674 Diluted earnings per share:        Net income attributable to Watsco, Inc. shareholders $163,336  $183,613  $242,410  $263,674 Less: distributed and undistributed earnings allocated to restricted common stock  10,733   12,159   16,855   17,409 Earnings allocated to Watsco, Inc. shareholders $152,603  $171,454  $225,555  $246,265 Weighted-average Common and Class B common shares and equivalent shares used to calculate diluted earnings per share  38,192,692   37,899,430   38,079,266   37,876,470 Diluted earnings per share for Common and Class B common stock $4.00  $4.52  $5.92  $6.50  WATSCO, INC.
Condensed Consolidated Balance Sheets
(Unaudited, in thousands)

  June 30,
2026
 December 31,
2025
Cash and cash equivalents $364,189  $433,283 Short-term cash investments  100,000   300,000 Accounts receivable, net  1,060,767   796,181 Inventories, net  1,890,473   1,386,317 Other current assets  38,668   38,725 Total current assets  3,454,097   2,954,506 Property and equipment, net  146,892   136,012 Operating lease right-of-use assets  509,300   452,547 Goodwill, intangibles, net and other  974,428   871,740 Total assets $5,084,717  $4,414,805 Accounts payable and accrued expenses $960,051  $600,589 Current portion of lease liabilities  119,723   117,153 Total current liabilities  1,079,774   717,742 Operating lease liabilities, net of current portion  406,478   350,616 Deferred income taxes and other liabilities  125,255   124,386 Total liabilities  1,611,507   1,192,744 Watsco, Inc. shareholders' equity  2,994,413   2,781,376 Non-controlling interest  478,797   440,685 Total shareholders' equity  3,473,210   3,222,061 Total liabilities and shareholders' equity $5,084,717  $4,414,805  WATSCO, INC.
Condensed Consolidated Statements of Cash Flows
(Unaudited, in thousands)  Six Months Ended June 30,   2026   2025 Cash flows from operating activities:    Net income $284,243  $311,308 Adjustments to reconcile net income to net cash used in operating activities:    Depreciation and amortization  21,943   21,687 Non-cash contribution to 401(k) plan  9,267   8,743 Share-based compensation  16,711   17,612 Provision for doubtful accounts  2,442   704 Other income from investment in unconsolidated entity  (13,909)  (12,528)Other, net  2,861   3,297 Changes in operating assets and liabilities, net of effects of acquisitions:    Accounts receivable, net  (244,560)  (131,119)Inventories, net  (443,966)  (552,956)Accounts payable and other liabilities  339,169   149,774 Other, net  4,359   (1,612)Net cash used in operating activities  (21,440)  (185,090)Cash flows from investing activities:    Net proceeds from short-term investments  200,000   255,669 Business acquisitions, net of cash acquired  7,663   (19,383)Capital expenditures, net  (15,898)  (14,034)Net cash provided by investing activities  191,765   222,252 Cash flows from financing activities:    Dividends on common stock  (255,920)  (230,497)Distributions to non-controlling interest  -   (69,829)Proceeds from dividend reinvestment plan  8,107   14,111 Other, net  10,453   11,982 Net cash used in financing activities  (237,360)  (274,233)Effect of foreign exchange rate changes on cash and cash equivalents  (2,059)  3,778 Net decrease in cash and cash equivalents  (69,094)  (233,293)Cash and cash equivalents at beginning of period  433,283   526,271 Cash and cash equivalents at end of period $364,189  $292,978  Barry S. Logan
Executive Vice President
(305) 714-4102
e-mail: [email protected]

The market expects Watsco (WSO - Free Report) to deliver a year-over-year decline in earnings on higher revenues when it reports results for the quarter ended June 2026. This widely-known consensus outlook is important in assessing the company's earnings picture, but a powerful factor that might influence its near-term stock price is how the actual results compare to these estimates.

The stock might move higher if these key numbers top expectations in the upcoming earnings report, which is expected to be released on July 29. On the other hand, if they miss, the stock may move lower.

While the sustainability of the immediate price change and future earnings expectations will mostly depend on management's discussion of business conditions on the earnings call, it's worth handicapping the probability of a positive EPS surprise.

Zacks Consensus EstimateThis heating and cooling company is expected to post quarterly earnings of $4.40 per share in its upcoming report, which represents a year-over-year change of -2.7%.

Revenues are expected to be $2.17 billion, up 5.3% from the year-ago quarter.

Estimate Revisions TrendThe consensus EPS estimate for the quarter has been revised 0.87% higher over the last 30 days to the current level. This is essentially a reflection of how the covering analysts have collectively reassessed their initial estimates over this period.

Investors should keep in mind that the direction of estimate revisions by each of the covering analysts may not always get reflected in the aggregate change.

Price, Consensus and EPS Surprise

Earnings WhisperEstimate revisions ahead of a company's earnings release offer clues to the business conditions for the period whose results are coming out. This insight is at the core of our proprietary surprise prediction model -- the Zacks Earnings ESP (Expected Surprise Prediction).

The Zacks Earnings ESP compares the Most Accurate Estimate to the Zacks Consensus Estimate for the quarter; the Most Accurate Estimate is a more recent version of the Zacks Consensus EPS estimate. The idea here is that analysts revising their estimates right before an earnings release have the latest information, which could potentially be more accurate than what they and others contributing to the consensus had predicted earlier.

Thus, a positive or negative Earnings ESP reading theoretically indicates the likely deviation of the actual earnings from the consensus estimate. However, the model's predictive power is significant for positive ESP readings only.

A positive Earnings ESP is a strong predictor of an earnings beat, particularly when combined with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold). Our research shows that stocks with this combination produce a positive surprise nearly 70% of the time, and a solid Zacks Rank actually increases the predictive power of Earnings ESP.

Please note that a negative Earnings ESP reading is not indicative of an earnings miss. Our research shows that it is difficult to predict an earnings beat with any degree of confidence for stocks with negative Earnings ESP readings and/or Zacks Rank of 4 (Sell) or 5 (Strong Sell).

How Have the Numbers Shaped Up for Watsco?For Watsco, the Most Accurate Estimate is higher than the Zacks Consensus Estimate, suggesting that analysts have recently become bullish on the company's earnings prospects. This has resulted in an Earnings ESP of +8.00%.

On the other hand, the stock currently carries a Zacks Rank of #2.

So, this combination indicates that Watsco will most likely beat the consensus EPS estimate.

Does Earnings Surprise History Hold Any Clue?While calculating estimates for a company's future earnings, analysts often consider to what extent it has been able to match past consensus estimates. So, it's worth taking a look at the surprise history for gauging its influence on the upcoming number.

For the last reported quarter, it was expected that Watsco would post earnings of $1.73 per share when it actually produced earnings of $1.87, delivering a surprise of +8.09%.

Over the last four quarters, the company has beaten consensus EPS estimates just once.

Bottom LineAn earnings beat or miss may not be the sole basis for a stock moving higher or lower. Many stocks end up losing ground despite an earnings beat due to other factors that disappoint investors. Similarly, unforeseen catalysts help a number of stocks gain despite an earnings miss.

That said, betting on stocks that are expected to beat earnings expectations does increase the odds of success. This is why it's worth checking a company's Earnings ESP and Zacks Rank ahead of its quarterly release. Make sure to utilize our Earnings ESP Filter to uncover the best stocks to buy or sell before they've reported.

Watsco appears a compelling earnings-beat candidate. However, investors should pay attention to other factors too for betting on this stock or staying away from it ahead of its earnings release.

Expected Results of an Industry PlayerAmong the stocks in the Zacks Manufacturing - General Industrial industry, Illinois Tool Works (ITW - Free Report) , is soon expected to post earnings of $2.8 per share for the quarter ended June 2026. This estimate indicates a year-over-year change of +8.5%. This quarter's revenue is expected to be $4.18 billion, up 3.2% from the year-ago quarter.

The consensus EPS estimate for Illinois Tool Works has been revised 0.4% lower over the last 30 days to the current level. However, a higher Most Accurate Estimate has resulted in an Earnings ESP of +0.31%.

This Earnings ESP, combined with its Zacks Rank #3 (Hold), suggests that Illinois Tool Works will most likely beat the consensus EPS estimate. The company beat consensus EPS estimates in each of the trailing four quarters.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.

MIAMI, July 01, 2026 (GLOBE NEWSWIRE) -- Watsco, Inc.’s (NYSE: WSO) Board of Directors has declared a regular quarterly cash dividend of $3.30 on each outstanding share of its Common and Class B common stock payable on July 31, 2026 to shareholders of record at the close of business on July 16, 2026.

Watsco has paid dividends to shareholders for 52 consecutive years. The Company’s philosophy is to share cash flow through dividends while keeping a conservative balance sheet with continued capacity to build its distribution network. Future changes in dividends will be considered in light of investment opportunities, cash flow, general economic conditions, and Watsco’s overall financial condition.

About Watsco

Watsco is the largest distributor in the highly fragmented North American HVAC/R market. Watsco’s solid financial position and culture of innovation has enabled investments in long-term growth, including the Company’s industry-leading technology platforms. Today, approximately 74,000 contractors, installers and technicians engage digitally with the Company, resulting in improved growth and lower attrition. The Company is now advancing AI-driven initiatives to leverage its extensive data assets to enhance the customer experience and improve efficiencies. These investments position Watsco to capture market share as contractors increasingly adopt digital tools and incorporate data-driven solutions in their businesses.

This document includes certain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements may address, among other things, our expected financial and operational results and the related assumptions underlying our expected results. These forward-looking statements are distinguished by use of words such as “will,” “would,” “anticipate,” “expect,” “believe,” “designed,” “plan,” or “intend,” the negative of these terms, and similar references to future periods. These statements are based on management's current expectations and are subject to uncertainty and changes in circumstances. Actual results may differ materially from these expectations due to changes in economic, business, competitive market, new housing starts and completions, capital spending in commercial construction, consumer spending and debt levels, regulatory and other factors, including, without limitation, the effects of supplier concentration, competitive conditions within Watsco’s industry, the seasonal nature of sales of Watsco’s products, the ability of the Company to expand its business, insurance coverage risks and final GAAP adjustments. Detailed information about these factors and additional important factors can be found in the documents that Watsco files with the Securities and Exchange Commission, such as Form 10-K, Form 10-Q and Form 8-K. Forward-looking statements speak only as of the date the statements were made. Watsco assumes no obligation to update forward-looking information to reflect actual results, changes in assumptions or changes in other factors affecting forward-looking information, except as required by applicable law.

Barry S. Logan
Executive Vice President
(305) 714-4102
e-mail: [email protected]

I advocate capitalizing on current market dislocations, emphasizing that waiting for clarity often means missing the best opportunities. Despite macro risks like potential stagflation, I see a regime shift favoring high-quality value stocks with pricing power and broadening growth. I highlight Carrier Global, Amazon, Union Pacific, and TransDigm as compelling buys due to strong secular growth and attractive valuations.

MIAMI, April 01, 2026 (GLOBE NEWSWIRE) -- Watsco, Inc.’s (NYSE: WSO) Board of Directors has declared a regular quarterly cash dividend of $3.30 on each outstanding share of its Common and Class B common stock payable on April 30, 2026 to shareholders of record at the close of business on April 16, 2026. This marks a 10% increase to an annual rate of $13.20 per share.

Albert H. Nahmad, Watsco’s Chairman & CEO stated: “We are pleased to increase dividends to shareholders, reflecting our continued confidence in our business, which is fundamentally supported by our strong balance sheet.”

Watsco has paid dividends to shareholders for 52 consecutive years. The Company’s philosophy is to share cash flow through dividends while maintaining a conservative balance sheet with continued capacity to build its distribution network. Future changes in dividends are considered in light of investment opportunities, cash flow, general economic conditions and Watsco’s overall financial condition.

About Watsco
Watsco is the largest distributor in the highly-fragmented North American HVAC/R market. Since entering distribution in 1989, Watsco has achieved a 17% compounded annual total-shareholder return through a combination of organic growth and the acquisition of more than 70 market-leading businesses.

Watsco’s solid financial position and culture of innovation has enabled investments in long-term growth, including the Company’s industry-leading technology platforms. Today, approximately 73,000 contractors, installers and technicians engage digitally with the Company, resulting in improved growth and lower attrition. The Company is now advancing AI-driven initiatives to leverage its extensive data assets to enhance the customer experience and improve efficiencies. These investments position Watsco to capture market share as contractors increasingly adopt digital tools and incorporate data-driven solutions in their businesses.

This document includes certain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements may address, among other things, our expected financial and operational results and the related assumptions underlying our expected results. These forward-looking statements are distinguished by use of words such as “will,” “would,” “anticipate,” “expect,” “believe,” “designed,” “plan,” or “intend,” the negative of these terms, and similar references to future periods. These statements are based on management's current expectations and are subject to uncertainty and changes in circumstances. Actual results may differ materially from these expectations due to changes in economic, business, competitive market, new housing starts and completions, capital spending in commercial construction, consumer spending and debt levels, regulatory and other factors, including, without limitation, the effects of supplier concentration, competitive conditions within Watsco’s industry, the seasonal nature of sales of Watsco’s products, the ability of the Company to expand its business, insurance coverage risks and final GAAP adjustments.

Detailed information about these factors and additional important factors can be found in the documents that Watsco files with the Securities and Exchange Commission, such as Form 10-K, Form 10-Q and Form 8-K. Forward-looking statements speak only as of the date the statements were made. Watsco assumes no obligation to update forward-looking information to reflect actual results, changes in assumptions or changes in other factors affecting forward-looking information, except as required by applicable law.

Barry S. Logan
Executive Vice President
(305) 714-4102
e-mail: [email protected]

MIAMI, April 10, 2026 (GLOBE NEWSWIRE) -- Watsco, Inc. (NYSE: WSO) announced today that it has scheduled a conference call to discuss its 2026 first quarter results on Tuesday, April 28, 2026 at 10:00 a.m. (EDT). Prepared remarks regarding the results will be followed by a question-and-answer session with the senior management team.

The conference call will be webcast by CCBN's StreetEvents and can be found under the link highlighted on our website at www.watsco.com. The earnings results will be released before the market opens on April 28, 2026. A replay of the conference call will be available on our website.

Investors and analysts are encouraged to pre-register for the conference call by using the link below. Participants who pre-register will be given a unique PIN to gain immediate access to the call. Pre-registration may be completed at any time up to the call start time.

To pre-register, go to: https://dpregister.com/sreg/10208363/103ce2f6754

Participants that would like to join, but have not pre-registered, can do so by dialing (844) 883-3908 within the United States or (412) 317-9254 internationally and asking for the “Watsco” call. Please call five to ten minutes prior to the scheduled start time as the number of telephone connections is limited.

Watsco is the largest distributor in the highly-fragmented North American HVAC/R market. Since entering distribution in 1989, Watsco has achieved a 17% compounded annual total-shareholder return through a combination of organic growth and the acquisition of more than 70 market-leading businesses.

Watsco’s solid financial position and culture of innovation has enabled investments in long-term growth, including the Company’s industry-leading technology platforms. Today, approximately 73,000 contractors, installers and technicians engage digitally with the Company, resulting in improved growth and lower attrition. The Company is now advancing AI-driven initiatives to leverage its extensive data assets to enhance the customer experience and improve efficiencies. These investments position Watsco to capture market share as contractors increasingly adopt digital tools and incorporate data-driven solutions in their businesses.

Barry S. Logan
Executive Vice President 
(305) 714-4102
e-mail: [email protected]

Posted by Defense World Staff on Apr 26th, 2026

AEGON ASSET MANAGEMENT UK Plc trimmed its position in shares of Watsco, Inc. (NYSE:WSO – Free Report) by 5.9% during the fourth quarter, according to the company in its most recent Form 13F filing with the Securities & Exchange Commission. The institutional investor owned 114,004 shares of the construction company’s stock after selling 7,187 shares during the quarter. AEGON ASSET MANAGEMENT UK Plc owned 0.28% of Watsco worth $38,440,000 at the end of the most recent reporting period.

A number of other hedge funds and other institutional investors also recently made changes to their positions in WSO. Capital International Investors lifted its position in Watsco by 741.4% in the 3rd quarter. Capital International Investors now owns 2,285,895 shares of the construction company’s stock valued at $924,187,000 after acquiring an additional 2,014,233 shares in the last quarter. State Street Corp lifted its position in Watsco by 1.4% in the 3rd quarter. State Street Corp now owns 1,238,121 shares of the construction company’s stock valued at $500,572,000 after acquiring an additional 16,595 shares in the last quarter. M&T Bank Corp lifted its position in Watsco by 60,779.4% in the 4th quarter. M&T Bank Corp now owns 599,662 shares of the construction company’s stock valued at $202,056,000 after acquiring an additional 598,677 shares in the last quarter. DAVENPORT & Co LLC lifted its position in Watsco by 31.8% in the 4th quarter. DAVENPORT & Co LLC now owns 470,177 shares of the construction company’s stock valued at $159,293,000 after acquiring an additional 113,333 shares in the last quarter. Finally, Hamlin Capital Management LLC lifted its position in Watsco by 13.3% in the 3rd quarter. Hamlin Capital Management LLC now owns 405,480 shares of the construction company’s stock valued at $163,936,000 after acquiring an additional 47,643 shares in the last quarter. 89.71% of the stock is owned by institutional investors.

Analyst Upgrades and Downgrades WSO has been the topic of several research reports. JPMorgan Chase & Co. boosted their price objective on shares of Watsco from $370.00 to $400.00 and gave the company a “neutral” rating in a research report on Thursday, February 19th. UBS Group initiated coverage on shares of Watsco in a research report on Monday, January 5th. They issued a “neutral” rating and a $370.00 price objective on the stock. Zacks Research raised shares of Watsco from a “strong sell” rating to a “hold” rating in a research report on Wednesday, February 25th. Mizuho set a $425.00 price objective on shares of Watsco in a research report on Wednesday, February 18th. Finally, Morgan Stanley cut their price objective on shares of Watsco from $460.00 to $370.00 and set an “equal weight” rating on the stock in a research report on Wednesday, January 14th. Eight analysts have rated the stock with a Hold rating, According to MarketBeat.com, the stock currently has a consensus rating of “Hold” and a consensus price target of $382.80.

Get Our Latest Stock Report on WSO

Watsco Price Performance Watsco stock opened at $440.78 on Friday. The firm has a market capitalization of $17.90 billion, a PE ratio of 36.40 and a beta of 1.06. The company’s 50-day moving average is $396.42 and its 200-day moving average is $375.24. Watsco, Inc. has a fifty-two week low of $323.05 and a fifty-two week high of $496.25.

Watsco (NYSE:WSO – Get Free Report) last released its quarterly earnings data on Tuesday, February 17th. The construction company reported $1.68 earnings per share for the quarter, missing the consensus estimate of $1.94 by ($0.26). The firm had revenue of $1.58 billion for the quarter, compared to analyst estimates of $1.62 billion. Watsco had a return on equity of 15.49% and a net margin of 6.87%.The firm’s revenue for the quarter was down 9.9% on a year-over-year basis. During the same quarter in the prior year, the firm earned $2.37 earnings per share. As a group, analysts expect that Watsco, Inc. will post 12.53 EPS for the current year.

Watsco Increases Dividend The business also recently declared a quarterly dividend, which will be paid on Thursday, April 30th. Investors of record on Thursday, April 16th will be paid a $3.30 dividend. This is an increase from Watsco’s previous quarterly dividend of $3.00. The ex-dividend date is Thursday, April 16th. This represents a $13.20 dividend on an annualized basis and a yield of 3.0%. Watsco’s dividend payout ratio (DPR) is currently 109.00%.

Watsco Profile (Free Report)

Watsco, Inc is the largest distributor of heating, ventilation, air conditioning and refrigeration (HVAC/R) equipment, parts and supplies in the United States. Headquartered in Miami, Florida, the company operates a network of more than 600 branches across the continental U.S., Canada and Puerto Rico. Watsco serves residential and commercial contractors by providing essential components for climate control systems, including air conditioners, furnaces, heat pumps, coils, refrigerants, controls and electrical and piping supplies.

Founded in 1947, Watsco has grown from a single regional distributor into an industry leader through a combination of organic expansion, acquisitions and strategic partnerships with original equipment manufacturers such as Carrier, Trane, Goodman and Lennox.

See Also Five stocks we like better than Watsco Want to see what other hedge funds are holding WSO? Visit HoldingsChannel.com to get the latest 13F filings and insider trades for Watsco, Inc. (NYSE:WSO – Free Report).

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MIAMI, April 28, 2026 (GLOBE NEWSWIRE) -- Watsco, Inc. (NYSE: WSO) today announced its operating results for the first quarter ended March 31, 2026.

Watsco also announced that it has entered into an agreement to acquire Jackson Supply Company, one of the largest Sunbelt HVAC distributors, with annual sales of $230 million. The transaction is expected to close in the second quarter of 2026, pending completion of customary closing conditions. Following closing, Jackson Supply will continue to be led by its existing management team, in keeping with Watsco's long-standing approach of investing in great leaders and successful cultures.

Watsco is the largest distributor in the highly fragmented North American HVAC market. Since entering distribution in 1989, Watsco has achieved an 18% compounded annual total shareholder return through a combination of organic growth and the acquisition of more than 70 market-leading businesses.

The Company maintains a solid financial position with $593 million in cash and short-term cash investments and no debt, enabling sustained investments in growth, including the Company’s industry-leading technologies. Approximately 74,000 contractors, installers and technicians engage digitally with the Company, which contributes to customer growth and reduced attrition. AI-driven initiatives have also been launched to further enhance the customer experience and improve efficiency. These investments are especially critical as contractors increase their adoption of digital, data-driven solutions in their businesses.

Business Trends
Market conditions gradually improved during the first quarter as the transition to A2L refrigerant products continued to mature. The A2L transition began during early 2025 and impacted approximately 55% of products sold (primarily domestic residential and light-commercial HVAC equipment) across 650 locations. In response, Watsco invested in inventory, people, technology, logistics, training and more to support its customers during the transition. The Company expects a more conventional industry environment and better prospects for growth as 2026 unfolds, with further potential to optimize inventory and improve operating efficiency in the long term.

First Quarter Performance

Revenues were flat at $1.53 billionGross profit was flat at $428 million (gross profit margin of 27.9% versus 28.1% last year)SG&A was also flat and consistent as a percentage of salesOperating income decreased 2% to $110 million (operating margin of 7.2% versus 7.3% last year)Earnings per share decreased 3% to $1.87Cash used in operations was $19 million versus $178 million last year, a $159 million improvement Sales trends

2% increase in overall sales in U.S. markets versus 11% sales decline internationally1% decrease in HVAC equipment (65% of sales)4% increase in sales of other HVAC products (30% of sales)11% increase in commercial refrigeration products (5% of sales) First quarter 2026 results reflect a 9% increase in average selling price for HVAC equipment from a higher sales mix of A2L products and higher-efficiency HVAC equipment, offset by lower unit volumes. SG&A expenses were flat, reflecting improved operating efficiency and a simpler operating environment compared to last year. Albert H. Nahmad, Chairman and CEO said: “We are extremely honored to welcome Jim Durrett and the entire Jackson Supply team to the Watsco family. Our relationship dates back more than 20 years, and we are grateful for the relationship and the commitment to entrust us with the next chapter of its 50-year legacy. This transaction adds meaningful scale and diversification to Watsco’s core Sunbelt markets. The Jackson Supply team possesses a strong track record of organic growth and an entrepreneurial spirit that closely aligns with our own. We look forward to learning from them and supporting their ambitious growth plans for years to come.”

Mr. Nahmad added: “Our markets are experiencing improved stability as we approach the Summer selling season for our products. Our teams are collaborating well with our contractor customers, who also have a more simplified, focused business environment in which to offer and sell their products and services. Our technology, our seasoned leadership team, our capital and our deep relationships in this wonderful industry serve us well and position us favorably to grow share.”

It is important to note that the first and fourth quarters of each calendar year are highly seasonal due to the timing of the replacement of HVAC systems and results are typically strongest in the second and third quarters. The Company’s first quarter financial results are disproportionately affected by seasonality.

        Innovation and Strategic Technology Initiatives
Watsco pioneered the industry’s most comprehensive digital ecosystem. The Company has invested more than $250 million in technology over the last five years (an annual current run rate of approximately $67 million). Highlights of Watsco’s customer-facing platforms include:

Watsco’s HVAC Pro+ Mobile Apps and E-Commerce platform have transformed the customer-experience by providing contractors with a seamless digital experience, including sourcing products, accessing technical help, real-time inventory, pricing, product information and more. These tools empower 24/7 self-service that benefit from intelligent search, dynamic reordering, technical knowledge and product recommendations. The result is a frictionless buying journey, increased convenience and higher customer satisfaction, which we believe drives greater loyalty and repeat business with lower costs to serve. First quarter highlights include:First quarter E-commerce sales grew 16% and were approximately $2.6 billion for the 12 months ended March 31, 2026 (36% of sales), with outperforming regions exceeding 60%. Order trends and the rate of improvement in customer attrition remain consistent year-over-year.
Total authenticated users of our HVAC Pro+ Mobile Apps increased to approximately 74,000.The addition of more than 10,000 new SKUs related to the A2L product launch, including all relevant data concerning features, dimensions, capacities, consumer literature and technical information, including bills of material, warranty information, regulatory match-ups and more. OnCallAir® is Watsco’s digital sales platform enabling contractors to engage, present and quote solutions to homeowners. The gross merchandise value (GMV) of products sold through OnCallAir® was approximately $394 million (a 20% increase) for the first quarter of 2026. For the twelve months ended March 31, 2026, contractors presented unique quotes to approximately 336,000 households and generated $1.9 billion GMV, a 20% increase versus the comparative period ended March 31, 2025.
A.J. Nahmad, Watsco’s President, added: “Our core technology platforms have continued to scale among customers, and we continue to innovate new ways to delight our customers. Last year, we set in motion incremental investments in new platforms that we believe will enhance growth with existing customers, attract new customers and boost profitability in the years ahead. These initiatives should provide great potential and enhance Watsco’s already-sizeable competitive advantage in the fragmented HVAC/R industry.”

Cash Flow, Dividends, Financial Strength and Liquidity
Cash flow use was $19 million for the first quarter of 2026 compared to a cash use of $178 million in the same period in 2025, reflecting a $159 million decrease in working capital. The Company expects more conventional working capital trends going forward, providing the opportunity for better inventory turns and enhanced returns on invested capital.

In April 2026, the Company increased its annual cash dividend by 10% to $13.20 per share. Watsco has paid dividends to shareholders for 52 consecutive years. The Company’s philosophy is to share cash flow through dividends while maintaining a conservative balance sheet with continued capacity to build its distribution network. Future changes in dividends are considered in light of investment opportunities, cash flow, general economic conditions and Watsco’s overall financial condition.

The Company’s objective is to maintain a healthy balance sheet that provides low-cost capital to fund strategic investments in growth. Watsco’s strong financial position has been key to its ability to deliver sustained long-term returns, enabling investments regardless of macroeconomic or industry conditions. The Company’s stated goal is to generate annual operating cash flow in excess of net income consistent with its long-term track record.

Buy & Build Acquisition Strategy
Once completed, Jackson Supply will mark the 73rd independent distributor that has elected to join the Watsco family and will contribute to Watsco’s scale and, more importantly, to its community of leaders. Since 2019, Watsco has acquired 12 companies that today represent approximately $1.6 billion in annualized sales and 120 locations. Our “buy and build” strategy builds upon their long-standing legacies through investment in new locations, new products and by leveraging Watsco’s technology platforms. The North American distribution landscape remains highly fragmented with more than 2,100 independent HVAC distributors.

First Quarter Earnings Conference Call Information
Date and time: April 28, 2026 at 10:00 a.m. (EDT)
Webcast: http://investors.watsco.com (a replay will be available on the Company’s website)
Dial-in number: United States (844) 883-3908 / International (412) 317-9254

About Watsco
Watsco is the largest distributor in the highly fragmented North American HVAC/R market. Watsco’s solid financial position and culture of innovation has enabled investments in long-term growth, including the Company’s industry-leading technology platforms. Today, approximately 74,000 contractors, installers and technicians engage digitally with the Company, resulting in improved growth and lower attrition. The Company is now advancing AI-driven initiatives to leverage its extensive data assets to enhance the customer experience and improve efficiencies. These investments position Watsco to capture market share as contractors increasingly adopt digital tools and incorporate data-driven solutions in their businesses.

This document includes certain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements may address, among other things, our expected financial and operational results and the related assumptions underlying our expected results. These forward-looking statements are distinguished by use of words such as “will,” “would,” “anticipate,” “expect,” “believe,” “designed,” “plan,” or “intend,” the negative of these terms, and similar references to future periods. These statements are based on management's current expectations and are subject to uncertainty and changes in circumstances. Actual results may differ materially from these expectations due to changes in economic, business, competitive market, new housing starts and completions, capital spending in commercial construction, consumer spending and debt levels, regulatory and other factors, including, without limitation, the effects of supplier concentration, competitive conditions within Watsco’s industry, the seasonal nature of sales of Watsco’s products, the ability of the Company to expand its business, insurance coverage risks and final GAAP adjustments. Detailed information about these factors and additional important factors can be found in the documents that Watsco files with the Securities and Exchange Commission, such as Form 10-K, Form 10-Q and Form 8-K. Forward-looking statements speak only as of the date the statements were made. Watsco assumes no obligation to update forward-looking information to reflect actual results, changes in assumptions or changes in other factors affecting forward-looking information, except as required by applicable law.

WATSCO, INC.
Condensed Consolidated Results of Operations
(In thousands, except share and per share data)
(Unaudited)      Quarters Ended March 31,   2026  2025 Revenues $1,533,010  $1,531,086 Cost of sales  1,105,455   1,101,463 Gross profit  427,555   429,623 Gross profit margin  27.9%  28.1%Selling, general and administrative expenses  322,851   322,581 Other income  5,480   5,146 Operating income  110,184   112,188 Operating margin  7.2%  7.3%Interest income, net  6,459   5,417 Income before income taxes  116,643   117,605 Income taxes  23,702   23,065 Net income  92,941   94,540 Less: net income attributable to non-controlling interest  13,867   14,479 Net income attributable to Watsco, Inc. $79,074  $80,061 Diluted earnings per share:      Net income attributable to Watsco, Inc. shareholders $79,074  $80,061 Less: distributed and undistributed earnings allocated to restricted common stock (1)  8,034   7,172 Earnings allocated to Watsco, Inc. shareholders $71,040  $72,889 Weighted-average Common and Class B common shares and equivalent
shares used to calculate diluted earnings per share  37,964,580   37,853,255 Diluted earnings per share for Common and Class B common stock (1) $1.87  $1.93  (1)The quarterly EPS results reflect dilution of 7 cents per share in 2026 ($2.8 million impact) and 5 cents per share in 2025 ($1.9 million impact) attributable to the amount that (a) dividends actually paid on restricted common stock exceeded (b) the net income allocable to restricted common stock. The Company expects this dilutive impact to be seasonal during the first and fourth quarters of each year due to EPS in such periods generally being less than the quarterly dividend rate.
WATSCO, INC.
Condensed Consolidated Balance Sheets
(Unaudited, in thousands)       March 31,
2026 December 31,
2025Cash and cash equivalents $392,679 $433,283Short-term cash investments  200,000  300,000Accounts receivable, net  839,237  796,181Inventories, net  1,715,195  1,386,317Other current assets  34,067  38,725Total current assets  3,181,178  2,954,506Property and equipment, net  133,299  136,012Operating lease right-of-use assets  460,731  452,547Goodwill, intangibles, net and other  874,289  871,740Total assets $4,649,497 $4,414,805Accounts payable and accrued expenses $834,157 $600,589Current portion of lease liabilities  117,714  117,153Total current liabilities  951,871  717,742Operating lease liabilities, net of current portion  358,490  350,616Deferred income taxes and other liabilities  124,216  124,386Total liabilities  1,434,577  1,192,744Watsco, Inc. shareholders' equity  2,762,105  2,781,376Non-controlling interest  452,815  440,685Total shareholders' equity  3,214,920  3,222,061Total liabilities and shareholders' equity $4,649,497 $4,414,805 WATSCO, INC.
Condensed Consolidated Statements of Cash Flows
(Unaudited, in thousands)     Quarters Ended March 31,   2026   2025 Cash flows from operating activities:    Net income $92,941  $94,540 Adjustments to reconcile net income to net cash used in operating activities:    Depreciation and amortization  11,019   10,777 Non-cash contribution to 401(k) plan  9,267   8,743 Share-based compensation  8,077   8,800 Provision for doubtful accounts  1,796   840 Other income from investment in unconsolidated entity  (5,480)  (5,146)Other, net  968   811 Changes in operating assets and liabilities, net of effects of acquisitions:    Accounts receivable, net  (45,516)  83,864 Inventories, net  (330,428)       (389,990)Accounts payable and other liabilities  234,710   8,887 Other, net  3,741   230 Net cash used in operating activities  (18,905)  (177,644)Cash flows from investing activities:    Net proceeds from short-term investments  100,000   255,669 Capital expenditures, net  (6,862)  (7,443)Business acquisitions, net of cash acquired  -   (3,670)Net cash provided by investing activities  93,138   244,556 Cash flows from financing activities:    Dividends on common stock          (121,775)  (109,037)Distributions to non-controlling interest  -   (69,829)Proceeds from dividend reinvestment plan  3,851   6,708 Other, net  3,954   10,479 Net cash used in financing activities          (113,970)        (161,679)Effect of foreign exchange rate changes on cash and cash equivalents  (867)  319 Net decrease in cash and cash equivalents  (40,604)  (94,448)Cash and cash equivalents at beginning of period  433,283   526,271 Cash and cash equivalents at end of period $392,679  $431,823 
Contact
Barry S. Logan   
Executive Vice President        
(305) 714-4102         
e-mail: [email protected]    

Watsco, Inc. (WSO) Q1 2026 Earnings Call Transcript

This month's trio included a dividend aristocrat.

MIAMI, June 02, 2026 (GLOBE NEWSWIRE) -- Watsco, Inc. (NYSE: WSO) announced today the closing of its acquisition of Jackson Supply Company.

Jackson Supply has been a cornerstone of the HVAC distribution industry for more than 50 years, growing from its founding in 1972 into one of the Sunbelt’s largest and most respected independent distributors, with $230 million in sales in 2025. This investment represents a meaningful expansion of Watsco’s footprint across the Sunbelt, adding 25 locations and approximately 5,000 contractor customers across Texas, Louisiana, Tennessee, Alabama, Mississippi, Oklahoma and Arizona — some of the fastest-growing markets in the United States.

Importantly, Jackson Supply will retain its name, vendor relationships, go-to-market strategy, brand identity, and culture – core elements that have driven its success. Jackson Supply will continue to be led by its existing leadership team, consistent with Watsco’s long-standing approach of investing in outstanding leaders and proven cultures.

Albert H. Nahmad, Watsco’s Chairman and CEO, said: “We are thrilled to officially welcome Jackson Supply into the Watsco family. Jim Durrett and his exceptional team have built one of the most respected and entrepreneurial businesses in the HVAC distribution industry over more than five decades. We are humbled by their success and look forward to investing in their growth and supporting their ambitions for years to come.”

The closing of the Jackson Supply transaction underscores Watsco’s ongoing commitment to expanding its share of the estimated $74 billion North American HVAC/R distribution market. Watsco remains actively engaged in seeking additional growth opportunities with high-quality, independent distributors who share its values and growth ambitions.

About Watsco 

Watsco is the largest distributor in the highly-fragmented North American HVAC/R market. Watsco’s solid financial position and culture of innovation has enabled investments in long-term growth, including the Company’s industry-leading technology platforms. Today, approximately 74,000 contractors, installers and technicians engage digitally with the Company, resulting in improved growth and lower attrition. The Company is now advancing AI-driven initiatives to leverage its extensive data assets to enhance the customer experience and improve efficiencies. These investments position Watsco to capture market share as contractors increasingly adopt digital tools and incorporate data-driven solutions in their businesses.

This document includes certain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements may address, among other things, our expected financial and operational results and the related assumptions underlying our expected results. These forward-looking statements are distinguished by use of words such as “will,” “would,” “anticipate,” “expect,” “believe,” “designed,” “plan,” or “intend,” the negative of these terms, and similar references to future periods. These statements are based on management's current expectations and are subject to uncertainty and changes in circumstances. Actual results may differ materially from these expectations due to changes in economic, business, competitive market, new housing starts and completions, capital spending in commercial construction, consumer spending and debt levels, regulatory and other factors, including, without limitation, the effects of supplier concentration, competitive conditions within Watsco’s industry, the seasonal nature of sales of Watsco’s products, the ability of the Company to expand its business, insurance coverage risks and final GAAP adjustments. Detailed information about these factors and additional important factors can be found in the documents that Watsco files with the Securities and Exchange Commission, such as Form 10-K, Form 10-Q and Form 8-K. Forward-looking statements speak only as of the date the statements were made. Watsco assumes no obligation to update forward-looking information to reflect actual results, changes in assumptions or changes in other factors affecting forward-looking information, except as required by applicable law.

Barry S. Logan
Executive Vice President
(305) 714-4102
e-mail: [email protected]

Watsco, Inc.
2665 S. Bayshore Drive, Suite 901
Miami, FL 33133, USA
(305) 714-4100
www.watsco.com